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General Ledger

Introduction to General Ledger

General LedgerA general ledger is the primary accounting record used by a business.

It contains all the financial transactions of a company, organized by accounts. The general ledger follows the double-entry accounting system, where each financial transaction affects at least two sub-ledger accounts and has at least one debit and one credit transaction.

The general ledger provides a record of each financial transaction that takes place during the life of an operating company and holds account information that is needed to prepare the company’s financial statements.

Bank Reconciliation

Bank reconciliation is a process that ensures a company’s cash records are accurate. It involves comparing the company’s recorded cash balance with the balance reported by the bank, and adjusting for any discrepancies. This process helps to identify errors, discrepancies, and fraudulent transactions. It involves comparing issued checks and deposits, adjusting for outstanding checks and deposits in transit, and reconciling any differences.

Payroll Records

Payroll records are used to track the compensation paid to employees, as well as the associated tax and other withholdings. These records are essential for calculating gross wages, net pay, and other payroll transactions. They include details such as employee compensation, benefits, employer taxes, payroll taxes, and deductions. Payroll journal entries are used to record these transactions in the company’s general ledger.

Journal Entries

Journal entries are records of financial transactions made in the course of business operations. They are the first step in the accounting cycle and follow the double-entry bookkeeping system, meaning each transaction affects at least two accounts – a debit entry and a credit entry. Journal entries help to sort transactions into manageable data, providing a chronological record of all financial transactions.

Profit & Loss Account

A Profit & Loss (P&L) account, also known as an income statement, shows the revenues and expenses of a business over a specific period, resulting in the net profit or loss. It is prepared by adding all the income earned and expenses incurred during the accounting period, and calculating the difference. If the value is positive, it represents profit, and if negative, it represents a loss.

Balance Sheet

A balance sheet is a financial statement that shows a company’s financial position at a specific point in time. It lists the company’s assets, liabilities, and shareholders’ equity. The fundamental equation for a balance sheet is Assets = Liabilities + Shareholders’ Equity. Preparing a balance sheet involves determining the reporting date and period, identifying and tallying all assets and liabilities, and calculating shareholders’ equity. The total assets and total liabilities should always be equal.

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Looking to navigate the world of finance with ease? Webnacc provides all these services and more, assisting you at every step of your financial journey. With our affordable pricing, we make accounting accessible for everyone.

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