What is General Ledger?
The general ledger (GL) is the master accounting record of a business, organized by account, that holds the cumulative balances and detailed transaction history for every asset, liability, equity, revenue, and expense account. It is fed by journal entries and serves as the basis for the trial balance and the financial statements.
How It Works
- Define the chart of accounts that structures the ledger.
- Post each journal entry’s debits and credits to the relevant GL accounts.
- Maintain running balances per account.
- Reconcile subledgers (AR, AP, inventory, fixed assets) to GL control accounts.
- Extract trial balance and prepare financial statements at period end.
Saudi Context
Qoyod and other Saudi cloud accounting platforms provide a GL that automatically integrates with ZATCA e-invoicing, payroll, inventory, and bank feeds. SOCPA expects every entity to maintain a clear chart of accounts and a GL audit trail; ZATCA may request the GL during tax inspections and zakat assessments.
Example
A company’s December bank reconciliation, sales register, and payroll posting all flow into the general ledger. At month end, the GL produces a trial balance with 215 active accounts that ties to the SAR 4.8 million reported in cash, SAR 2.1 million in receivables, and SAR 9.6 million in revenue.