What Is GL Accounting Process?

What are the basic accounting procedures?

Transactions.

The accounting cycle starts with transactions.

Journal entries.

Posting from the journal to the general ledger.

Trial balance.

Adjusting entries.

Adjusted trial balance.

Financial statements.

Closing entries.More items…•.

What are the 5 main activities involved in accounting?

The five main activities involved in accounting are gathering financial information; preparing and collecting permanent records; rearranging, summarizing, and classifying financial information; preparing information reports and summaries; and establishing controls to promote accuracy and honesty among employees.

What is GL accounting?

What Is a General Ledger? A general ledger represents the record-keeping system for a company’s financial data with debit and credit account records validated by a trial balance. The general ledger provides a record of each financial transaction that takes place during the life of an operating company.

What are the 6 steps in the accounting process?

These steps are: (1) analyzing the transactions as they occur, (2) recording them in the journals, (3) posting debits and credits from journal entries to the general ledger, (4) adjusting the assets with a trial balance, (5) preparing financial statements, and (6) closing the temporary accounts.

What is the difference between general ledger and journal entry?

Key Takeaways. The journal consists of raw accounting entries that record business transactions, in sequential order by date. The general ledger is more formalized and tracks five key accounting items: assets, liabilities, owner’s capital, revenues, and expenses.

What is General Ledger with example?

A common example of a general ledger account that can become a control account is Accounts Receivable. The summary amounts are found in the Accounts Receivable control account and the details for each customer’s credit activity will be contained in the Accounts Receivable subsidiary ledger.

Is T account same as general ledger?

The credits and debits are recorded in a general ledger, where all account balances must match. The visual appearance of the ledger journal of individual accounts resembles a T-shape, hence why a ledger account is also called a T-account.

How does a GL work?

A general ledger (GL) is a set of numbered accounts a business uses to keep track of its financial transactions and to prepare financial reports. Each account is a unique record summarizing each type of asset, liability, equity, revenue and expense.

How do you use a general ledger?

The line items are called ledger entries. Transfer the debit and credit amounts from the journal to the ledger account. After posting entries to the general ledger, calculate the balance of each account. Calculate the balance of an asset or expense account by subtracting the total credits from the total debits.

What is GL reconciliation process?

This General Ledger Reconciliation process takes place after the end of a financial reporting period. … This involves comparing the general ledger account balance to information contained in other independent systems and sources of financial data, such as bank statements and credit card statements.

What is GL journal entries?

Journal entries are how transactions get recorded in your company’s books on a daily basis. Every transaction that gets entered into your general ledger starts with a journal entry that includes the date of the transaction, amount, affected accounts, and description.

What goes in a general ledger?

The general ledger should include the date, description and balance or total amount for each account. It is usually divided into at least seven main categories. These categories generally include assets, liabilities, owner’s equity, revenue, expenses, gains and losses.

What is the main ledger?

A ledger is the principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.

What is the 10 Step accounting cycle?

The 10 steps are: analyzing transactions, entering journal entries of the transactions, transferring journal entries to the general ledger, crafting unadjusted trial balance, adjusting entries in the trial balance, preparing an adjusted trial balance, processing financial statements, closing temporary accounts, …

Is General Ledger same as balance sheet?

The general ledger contains the accounts used to sort and store a company’s transactions. … Balance sheet accounts: assets, liabilities, stockholders’ equity. Income statement accounts: operating revenues, operating expenses, other revenues and gains, other expenses and losses.