A general ledger is a record of all the financial transactions that have taken place in a business over a period of time. It is a book of original entry, which means that all transactions are first recorded in the general ledger before they are posted to the individual account ledgers.
The general ledger is divided into different sections, each of which contains the accounts for a specific type of asset, liability, equity, revenue, or expense. For example, the asset section of the general ledger would contain accounts for cash, accounts receivable, inventory, and fixed assets.
The general ledger is an important tool for financial management because it provides a complete and accurate record of all financial transactions. This information can be used to prepare financial statements, track financial performance, and make financial decisions.