FAQ - What is a General Ledger?

The General Ledger (GL) is the foundation of any accounting system — whether that system is dedicated software, a spreadsheet, or a traditional paper ledger. 

The General Ledger is commonly referred to as “the books." It contains all transactions for every account that a business or organization needs to track. 

Smartwebs Accounting is built around the General Ledger. It provides a suite of tools and workflows to streamline and automate the tracking and documentation of General Ledger transactions. 

General Ledger transactions are a mechanism to categorize and allocate monies into various GL accounts to help an entity track financial transactions and account totals. This allows for visibility into where monies are being paid and received. For example, an organization may receive multiple payments for goods and services — each recorded in the General Ledger. When those funds are later used to purchase office furniture, that transaction is also recorded in the General Ledger. This gives users a clear view of how much money was received and how it was spent. 

Every transaction in the General Ledger consists of one or more line-item entries, each representing an individual debit or credit record.  

• Each transaction is required to net to $0 (total debits equals total credits).  
• Each transaction must contain a minimum of 2 line-item entries (1 debit and 1 credit) but may contain n number of     each. 
• Each line item in the transaction must share the same posting date. 
• Each line item must specify the General Ledger account from the Chart of Accounts.