What is the general ledger?

What is the general ledger?

• A. It is a complete set of all individual accounts and their balances.
• B. It is a complete record of only cash and short-term investments.
• C. It lists only revenue and expense accounts.
• D. It tracks only asset changes.

Answer: (A)

The general ledger is the central record that contains every account a business uses, along with the current balance of each one. After transactions are recorded in the journal, they’re posted to their respective accounts in the general ledger, giving a running balance for assets, liabilities, equity, revenues, and expenses all in one place. This comprehensive collection allows you to see the complete financial position and to prepare a trial balance and financial statements. It’s not limited to cash or short‑term investments, not restricted to revenue and expense accounts, and not only tracking asset changes—it's all accounts and their balances. That’s why the description of the general ledger as a complete set of all individual accounts and their balances is the best choice.

The general ledger is the central record that contains every account a business uses, along with the current balance of each one. After transactions are recorded in the journal, they’re posted to their respective accounts in the general ledger, giving a running balance for assets, liabilities, equity, revenues, and expenses all in one place. This comprehensive collection allows you to see the complete financial position and to prepare a trial balance and financial statements. It’s not limited to cash or short‑term investments, not restricted to revenue and expense accounts, and not only tracking asset changes—it's all accounts and their balances. That’s why the description of the general ledger as a complete set of all individual accounts and their balances is the best choice.