A general ledger (GL) is a chronological accounting record a business uses to keep track of financial transactions. Transactions are categorized and summarized into accounts. An account is a unique record for each type of asset, liability, equity, revenue and expense. The number and type of accounts that make up the general ledger is determined by the chart of accounts (COA).
The general ledger is the primary component of most financial accounting software applications. It can be thought of as an electronic database that provides the data required to build financial reports. General ledger is at the core of any enterprise resource planning (ERP) financial management system, which encompasses the functions that are required to maintain one or more sets of books, generate financial reports, manage cash and fixed assets and execute payment and receivable transactions.
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