What Does a General Ledger Tell You?

The general ledger’s transaction information is gathered and summarised at several levels to provide a trial balance, income statement, balance sheet, statement of cash flows, and a variety of other financial reports. Accountants, corporate management, analysts, investors, and other stakeholders can use this information to evaluate the firm’s performance on a regular basis. The financial statement data frequently doesn’t tell the entire picture when costs surge in a certain period or a firm records other transactions that influence sales, net income, or other critical financial indicators. Certain forms of accounting mistakes necessitate going back to the general ledger and digging into the details of each recorded transaction in order to find the problem. This might often include going through hundreds of journal entries, but it’s critical to keep your company’s financial statements error-free and believable.