General ledger is the main accounting ledger used by businesses to debit and credit accounts and is used to create businesses’ financial statements. To follow the generally accepted principles of accounting (GAAP) and standard accounting practices, businesses follow the double-entry accounting method where every transaction in a business is recorded as a debit and a credit. These records keep track of the business's assets, liabilities, equity, revenue, expense, gain, and sometimes other details into individualized accounts. The general ledger records all of the activity within each account. Sometimes transactions may be grouped together into smaller ledgers, but they will be recorded as a group into the general ledger. The general ledger is the source for creating the aggregate information needed for the financial statements and for any research into a business’s transactions.
[Last updated in January of 2022 by the Wex Definitions Team]