In the double-entry system, each financial transaction affects at least 2 different ledger accounts. However, if you want to create your own general ledger, you’ll first need to understand the basics of double-entry bookkeeping. Most businesses use accounting software that posts all financial transactions directly to the general ledger. According to CPA Practice Advisor, only 18% of small- to medium-sized businesses do not use accounting software. The ledger might be a written record if the company does its accounting by hand or electronic records when it uses accounting software. They can also result from journal entries, such as recording depreciation. The transactions result from normal business activities such as billing customers or purchasing inventory. The company’s bookkeeper records transactions throughout the year by posting debits and credits to these accounts.
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