Sunday, August 16, 2009

“General Ledger” is an Old Accounting Report That Still Has Uses

This article was written by Dick Ginnaty, CPA

clip_image002In the world of accounting “General Ledger” is not a military hero, or the father of Keith, but a useful accounting report that every business person should be aware of.

A general ledger contains every accounting entry to each account in the chart of accounts. So every debit and credit which is a result of an accounting transaction during the period in question is recorded in the general ledger. For example, by reviewing the general ledger entries for an account that seems to be in error, (let’s say “rent expense” seems too high), you can discover the root of the problem and if you are operating in QuickBooks you can correct the erroneous entry right then.

This report is most useful when reviewing the tax liability accounts, the fixed asset accounts, the loan liability and interest expense accounts. Each of these accounts tends to have errors in them or have dates of payments that are critical to complete the tax returns correctly. Don’t be surprised if your accountant is asking for this report to be printed out for their review.

To see the general ledger in QuickBooks, go to “Reports” tab, and select “Accountant & Taxes”, then select “General Ledger”. You can then view all the activity in all the accounts, or by using the filter capability of QuickBooks you can just view the accounts that are of interest.

P.S. If there is any area in accounting or tax that you think needs to be addressed in this column please e-mail me at and if it is of general interest, I will address it in future column.

Good luck and here’s hoping it “all adds up” for you.