January 29, 2022


Accounting + Finance Blog

General Ledger (GL) Meaning, Explanations, Double Entry

General Ledger (GL) Meaning, Explanations, Double Entry

General ledger (GL) served other purposes that cannot be done in the sales and purchases ledger books. This book contains the bulk of transactions that occur in a business.

Definition of General Ledger

The general ledger is one of the main books of accounts that hold the accounts of a business other than those that go through the sales and purchases ledger. It can also be defined as a book for all business transactions except credit sales and purchases transactions.

Key Explanations

It is one of the main books of accounting. And it is used to enter the double-entry of most cash and credit transactions of a business. Its limitations are its inability to contain transactions relating to credit sales and credit purchases. Transactions involving credit sales go to the sales (trade receivables) ledger while credit purchases enter the purchases (trade payables) ledger.

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This ledger also housed the cash book. But in most entities, the cash book may be separated from the general ledger. However, you should know that the cash and bank account of a firm falls under the GL.

Although the general ledger does not include items of sales and purchases books, part of the double-entry is completed in the GL. For example, a credit sale of goods to Temitope means that there will be an account for Temitope in the sales ledger while the second account will be sales a/c in the GL.

Examples of accounts you will find in a general ledger include but are not limited to cash and bank account (cash book), capital account, drawing account, profit and loss account, commission account, electricity a/c, sales and purchase a/c returns a/c, bad debt accounts, furniture and fittings among others.

Double Entry Application for General Ledger

Unlike sales and purchases ledger, there is no specifically double entry for the general ledger. What’s the solution? You need a more general knowledge of the double-entry principle to post to the GL. More so, this book of accounts contains all the classes of accounts. That is assets, expenses, liabilities, capital, and income. Therefore, understanding the double entry for each of these accounts can help you solve problems relating to the general ledger.

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The double entry rule is as follows:

  • Debit all Assets and Expenses
  • Credit all Liabilities, Capital and Income

With this rule, you can solve some accounting problems. For example, an entity acquired a generator on credit from Ejiro business enterprises. The accounts involved are generator a/c and Ejiro business enterprises a/c. These two accounts are GL. Next, you should check their class of account. The generator is an asset account, so, debit it. And Ejiro business enterprises is a liability account so credit it. The double entry becomes

  • Debit: Generator account
  • Credit: Ejiro business enterprises account


A general ledger book is used to record all business transactions other than those that entered in the SL and PL books. It is a more general book and contains almost all the accounts of a business organization.