What Is a General Ledger? Accounts and a Worked Example

What belongs in a general ledger?

Each account needs its code and name, dates, descriptions, source or journal references, debit and credit amounts, and a balance. A spreadsheet containing only bank deposits and payments is not a complete general ledger: it omits transactions such as unpaid customer invoices and depreciation.

Assets and expenses normally increase with debits; liabilities, equity and revenue normally increase with credits. These are accounting directions, not universal synonyms for money in and money out. A bank’s statement describes its side of the deposit relationship, so its labels should not be copied blindly into a business journal.

Six transactions for fictional Cedar Studio

Cedar Studio starts with zero balances in October 2026. The example assumes a sole proprietor, amounts in dollars, no sales tax, no opening liabilities and no period-end adjustments. Its codes are illustrative, not an accounting standard. The source records below are fictional teaching references, not customer documents.

• J1, contribution record CAP-01: owner deposits $5,000. Debit 1000 Cash; credit 3000 Owner capital, $5,000 each.
• J2, service receipt SR-01: services paid immediately, $1,200. Debit 1000 Cash; credit 4000 Revenue.
• J3, supplier receipt SUP-01: unused supplies purchased for $300 cash. Debit 1200 Supplies; credit 1000 Cash.
• J4, equipment invoice EQ-01: equipment purchased for $1,800 cash. Debit 1500 Equipment; credit 1000 Cash.
• J5, October rent receipt RENT-10: $600 paid for the current month. Debit 6100 Rent expense; credit 1000 Cash.
• J6, customer invoice INV-01: $800 of services earned on account. Debit 1100 Receivables; credit 4000 Revenue. No cash changes hands.

Post the journal into account ledgers

Cash has two debit postings, J1 $5,000 and J2 $1,200, and three credit postings, J3 $300, J4 $1,800 and J5 $600. Its balance is $6,200 minus $2,700 = $3,500 debit. J6 does not belong in Cash. Revenue has J2 $1,200 and J6 $800 credits, totaling $2,000.

The other ending balances are Receivables $800 debit, Supplies $300 debit, Equipment $1,800 debit, Owner capital $5,000 credit and Rent expense $600 debit. Preserve J1 through J6 in both views so another person can trace a ledger movement back to the original transaction rather than reconstructing it from a total.

The trial balance is $7,000 on each side

Debit balances total $3,500 + $800 + $300 + $1,800 + $600 = $7,000. Credit balances total $5,000 + $2,000 = $7,000. Journal activity totals $9,700 of debits and $9,700 of credits, but that is not the trial-balance total: the latter uses net account balances.

These are unadjusted balances before depreciation, supply usage or any other closing adjustments. Revenue less the example’s only expense is $1,400; assets of $6,400 equal capital of $5,000 plus that profit. This is a teaching check, not a complete set of financial statements.

What a balanced ledger does not establish

Equal debits and credits cannot detect an omitted whole transaction, the wrong account used on both sides, or an equal duplicate entry. Compare receivables with unpaid invoices, equipment with acquisition records, and Cash with a bank reconciliation. OpenStax’s accounting-cycle and trial-balance chapters explain these separate controls.

Use the general-ledger template for a blank journal and account-level working records. Fulla can convert bank-statement PDFs to reviewed transaction exports, but it does not choose these ledger accounts, post the journals or establish the completeness of noncash accounting records.