The general ledger records all current accounts that are open.
The general ledger is where a merchant records, by debit and credit and according to a date order, all current accounts with people or objects under whose names they are opened.
From the Latin liber , a book is a set of sheets of paper or other material that form a volume by binding. It usually has 50 or more sheets and is a literary, scientific or other work . In accounting , books are the documents where the business operations or the movement of money of an organization are recorded.
The adjective mayor , on the other hand, can have two main interpretations: if it is used as a comparative, it is used to describe a living being or an object, indicating that its age, relevance or size are greater than those of another subject; on the other hand, if it is used as a superlative, then it indicates that the noun it modifies is the oldest, the most relevant or the largest physically, among other possibilities, such as being the main one .
Features of the ledger
The ledger has one page for each account . The pages are divided into five columns: Date , Concept , Debit , Credit , and Balance . An entry in the ledger might look like this:
ACCOUNT: Banks
DATE: 04/06/2005
CONCEPT: Payment of 3/5 installment of the loan for machinery
DEBIT: $2,380.50 (two thousand three hundred and eighty pesos and fifty cents)
HAVE: –
BALANCE: – $6,082.35 (minus six thousand eighty-two pesos and thirty-five cents)
This record is known as the general ledger as it includes all the transactions of the sub-accounts . Each of the accounts, therefore, groups together several sub-accounts. For example: the Customers account will show the transactions of all the customers' sub-accounts, the Banks account will do the same for the banking institutions, etc.
A spreadsheet can help you compile your general ledger.
Its use in companies
Companies use general ledgers to record the details of every transaction they make on a daily basis, recording each transaction chronologically and designating it as a credit or debit, as appropriate. All financial transactions flow through the general ledger, which is also used to produce various reports, such as the income statement, profit and loss statements, and balance sheet.
When it comes to creating a general ledger, there are basically two possible paths: either you can purchase one of the many programs specifically designed for this purpose, or you can use your favorite spreadsheet program, such as Excel, and do it by hand.
Steps to create a general ledger in Excel
Below is a simple general ledger template, which we can create in a few minutes. Once we have opened Excel, we need to:
- In cells A1, B1, C1, and D1, type “Entry Date,” “Account Name,” “Debit/Credit,” and “Amount,” respectively.
- Enter the financial transactions in these fields . Taking the purchase of computer supplies as an example, we must specify the date, “computer supplies” as the Account Name , “D” in C2 to indicate that it is a debit and the amount in D2. It is worth mentioning that, although all spreadsheet programs allow you to sort records by various criteria (such as by date), it is advisable to enter them in chronological order directly, to avoid potential confusion.
- Click on “Insert,” followed by “PivotTable” (this may vary slightly depending on your version of Excel).
- Holding down the left mouse button, select all rows starting with cell B1 and ending with the last cell in column D that we have completed.
- Click on “Next”, “New Spreadsheet” and “Finish”.
- To complete the “Line” field, left-click the “Account Name” field and drag it to the corresponding text box.
- Similar to the previous point, drag “Debit/Credit” and “Amount” to “Column” and “Data” respectively.
- In the toolbar , click on “PivotTable” and “Table Options.”
- Uncheck the “Grand Row Totals” box and click OK to complete the process.