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What is a general ledger account?

Definition of General Ledger Account
A general ledger account is an account or record used to sort, store and summarize a company's transactions. These accounts are arranged in the general ledger (and in the chart of accounts) with the balance sheet accounts appearing first followed by the income statement accounts.

Examples of General Ledger Accounts
Some of the more common balance sheet accounts and how they are further arranged in the general ledger include:

  • asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and Equipment
  • liability accounts including Notes Payable, Accounts Payable, Accrued Expenses Payable, and Customer Deposits
  • stockholders' equity accounts such as Common Stock, Retained Earnings, Treasury Stock, and Accumulated Other Comprehensive Income

Some of the general ledger income statement accounts and how they are arranged include:

  • operating revenue accounts such as Sales and Service Fee Revenues
  • operating expense accounts including Salaries Expense, Rent Expense, and Advertising Expense
  • nonoperating or other income accounts such as Gain on Sale of Assets, Interest Expense, and Loss on Disposal of Assets

General Ledger Control Accounts
Some general ledger accounts can become summary records and will be referred to as control accounts. In that situation all of the detail that supports the summary amounts in one of the control accounts will be available in a subsidiary ledger.

Examples of General Ledger Control Accounts
A common example of a general ledger account that can become a control account is Accounts Receivable. The summary amounts are found in the Accounts Receivable control account and the details for each customer's credit activity will be contained in the Accounts Receivable subsidiary ledger.

Other general ledger accounts that may become control accounts include Inventory, Equipment, and Accounts Payable.