When using the Quickbooks accounting software for your small business, you’ll probably come across the term “general ledger.” Of course, general ledgers aren’t restricted to Quickbooks. They are used in all forms of financial accounting for businesses. Unfortunately, many small business owners are unfamiliar with the term, and because of this, they are unable to utilize it correctly. General ledgers are actually relatively simple, however, and we’re going to explain how they work in this blog post.
Overview of General Ledgers
A general ledger is essentially a snapshot of your business’s financial transactions. It contains every expense and income transaction that your business has performed for a given period. Within a general ledger, you’ll find your business’s transactions, chart of accounts and more, which you can use to generate a trial balance.
You should think of the general ledger as being an overview of your business’s finances. Although it primarily contains your business’s financial transactions, it also includes other information like account names and dates.
Chart of Accounts
A key element of a general ledger is the chart of accounts. As the name suggests, the chart of accounts contains a list of all accounts that your business needs to perform its respective operations along with a unique account number. It’s not uncommon for a business’s chart of accounts to grow or shrink over time. If your business grows and requires more accounts, your chart of accounts will grow with it. On the other hand, if your business experiences a slow period and needs fewer accounts, your chart of accounts will shrink with it.
When viewing the details of a general ledger in Quickbooks, you’ll see a few different fields of information. For instance, this usually includes the account name and number as well as the transaction date and debit or credit amount.
How to Run General Ledger Report in Quickbooks
Now that you know a little bit about general ledgers, you might be wondering how to create one using Quickbooks. With Quickbooks Desktop, you can create a general ledger report by logging in to your account and accessing Reports > Accountants and Taxes > General Ledger. Quickbooks will then create a general ledger report containing all your business’s transactions. Alternatively, you can create a general ledger report in Quickbooks by accessing the balance sheet or income statement and double-clicking a line to show a transaction report for all items associated with the account.
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