What does the general ledger contain?

What does the general ledger contain?

• A. A separate ledger account for every asset, liability, income and expenses
• B. A single cash balance
• C. Only revenue and expenses
• D. Only assets and liabilities

Answer: (A)

The general ledger is the main record of all financial accounts a business uses. It contains a separate ledger account for every asset, liability, income (revenue) and expense, and it keeps the postings and running balances for each one. Transactions from journals are posted into these individual accounts, so you can see the balance of every item and compile a trial balance and the financial statements. It’s not just a single cash balance, because cash is simply one account within the ledger. It’s also not limited to revenue and expenses, nor only to assets and liabilities—those are all included to give a complete picture of the business's financial position.

The general ledger is the main record of all financial accounts a business uses. It contains a separate ledger account for every asset, liability, income (revenue) and expense, and it keeps the postings and running balances for each one. Transactions from journals are posted into these individual accounts, so you can see the balance of every item and compile a trial balance and the financial statements. It’s not just a single cash balance, because cash is simply one account within the ledger. It’s also not limited to revenue and expenses, nor only to assets and liabilities—those are all included to give a complete picture of the business's financial position.