The QuickBooks general ledger aids QuickBooks users in maintaining the general ledger transactions of any kind effortlessly. For operating the business effectively and efficiently from any place QuickBooks permits
the user to sync everything on their respective devices. With the help of the QuickBooks software users can successfully maintain the
financial statements, income, expenses, receipts, and payments of their company at any point in time and from any place. A wide range of business transactions can be recorded in the books of account, as per the dual aspects of accounting.
It also mandates the involvement of a minimum of two accounts. This also signifies that with a decrease in one of those accounts, there is an increase in the other account.
Through this article let’s learn more about the QuickBooks General Ledger.
An Overview About QuickBooks General Ledger
The QuickBooks General Ledger is an itemized description of all the transactions including both debit and credit accounts. As we discussed earlier, the QuickBooks software effectively maintains the financial statements of the company and along with this it also manages the other accounting activities. A general QuickBooks general ledger can be simply defined as the record of individual accounts including the debit and credit transactions related to the same account.
For instance, if you are purchasing furniture, for the whole fiscal year from any XYZ ltd. hen all the transactions related to furniture will be recorded in the Furniture A/c and that particular record refers to the Ledger. All the accounts related information is recorded in the general ledger. Financial statements can be easily created with reference to these ledger accounts.
Both the income statements and the balance sheet as the component of financial statements of any organization.
The QuickBooks general ledger consist of the following elements:
● Asset
● Liability
● Capital
● Income and expenses.
Merits of General ledger
The general ledger is amongst the most essential records in the whole accounting system. The ledger is prepared once you’re done with the journal entries. As we discussed above, every transaction has its own account while ledger posting. For example sales account, purchase account, furniture, account and many more.
Exact Location of Specific Account
The financial transactions are recorded under different accounts in the general ledger of the organization accordingly. These ledger accounts are often closed at the end of every fiscal year. After balancing both the credit and debit side of all the ledger accounts.
And this helps in understanding the exact position of the business with regards to expenses, revenues, debtor or creditor and many more.
For instance, any amount is to be collected from the debtors or any sort of payment is to be done against the creditors.
Trouble Free Audits
As stated earlier, the general ledger is one of the essential components of the financial records of any company and it is consistently audited. As different transactions are recorded under different account heads in the general ledger, it becomes easy to examine the accounts thoroughly.
Trouble Free Filing of Tax
The QuickBooks general ledger accounts can also be used for recording the information of all the transactions of the company that takes place within a particular financial year. For instance, if you are selling any product You will prepare a separate ledger i.e. The sales account and all the details including the invoice no., total units sold, details of the customer, tax paid and many more has to be included in that particular account. The income and expense account comes out with the exact expenses and income incurred by the company within the accounting period.
Recognition of Abnormal Transactions
As we all are aware of the fact that multiple transactions are being recorded in the books of accounts for every financial year. And if all these transactions are not classified in the general ledger, the recognition of the unwonted or abnormal transactions becomes more challenging and difficult.
For example, you sold any commodity to your customer and mistakenly recorded this transaction twice. In such cases, if ledger accounts aren’t prepared it will become very frustrating and difficult to recognize this transaction.
Evaluation of Financial Health of The Company
The trial balance is prepared with reference to the general ledger accounts and with the help of the trial balance, the financial statements can be easily created. Both the balance sheet and then revenue statement comes under this head. These final statements help in assessing the growth and profitability of the business over the past few years. You can easily measure the profitability of your business and also the loopholes.
How to Prepare Financial Statements
To prepare the financial statements, it is mandatory to prepare the general ledger. The financial statements might include the trading account, profit and loss, account, income, balance sheet and income and expense account. Even though the trial balances can also be prepared using the general ledger, offering higher accuracy and preciseness of data.
And hence we can conclude that if the general ledger is not prepared, it becomes very difficult to proceed further with the preparation of the financial statements
Classifications of General Ledger Accounts
There are six categories in which the QuickBooks general ledger accounts are classified.
- The Assets A/c- All those resources which are owned by the owner and hold some value in monetary terms or can be easily converted into cash, can be referred to as Asset. For example, inventory, land, machinery, debtors etc.
- The liability A/c- Any thing which you or your business is obliged to pay after a certain period of time is referred to as a liability.
- Shareholders capital- In simple terms the money invested by the Shareholder in the company is defined as the shareholders capital or when all types of liability which the business ought to pay are being deducted from the total assets then
the balance left is called the Shareholders Capital. - Operating Income A/c- Operating income refers to the money earned by performing the core business activities. It helps in determining the adequacy to earn profits from the core business operations. Ex- sale, fee, etc.
- Operating expense A/c.- All those expenses or costs that are incurred on a regular basis is referred to as an operating expense. Such expenses can’t be avoided; it includes wages, salaries, rent etc.
- Non-operating A/c.- Non-operating expenses or income A/c is not directly related to the core business activities or operations. These are the one-time expenses or incomes incurred in any business. For example, interest charged, interest on earnings, and many more.
Objective of QB General Ledger
The general ledger aids in keeping a record of all the transactions that take place in the business within a particular fiscal year. These transactions are further classified as asset, liability, income, expense, and capital. The QuickBooks general ledger helps the user to keep a track of the following:
- Keeps a track of the activities of the company- The general ledger records multiple transactions from sales of any commodity to purchase everything is recorded. Hence, making the further steps easier to perform such as making financial statements.
- Keep a track of the expenses of the business- Keeping a track of all the financial expenses is very essential for every business or company. But at the same time it is a challenging task. The general ledger helps you in keeping a record of all those expenses without much effort.
How the QB General Ledger Report Works?
Balances are maintained in QuickBooks by using the dual-entry system. Following are certain requirements for maintains the general ledger accounts:
● Both debit and credit should have the identical dollar amounts.
● There should be both debits and credits in every journal entry.
● There should not be the same number of debit and credit transactions in each
account.
For maintaining the balance a balance sheet formula is used by QuickBooks.
How to determine Value of Assets?
ASSETS= LIABILITIES + CAPITAL
Assets are determined by adding the capital and liabilities.
General Ledger in QuickBooks
A general ledger prepares a proper record of all the transactions for a given period of time in QuickBooks Online. The initial report shows the aggregate of all the accounts. This feature is available in all the editions or versions of QuickBooks Online. Assets A/c includes, cash accounts, bill receivables, etc.
How to Find General Ledger in QuickBooks
● Go to your QuickBooks desktop.
● Tap on reports.
● Click on All.
● Click on My accountant.
● Select the General Ledger.
● Select the range of the data.
● Lastly, click on the run report.
How is General Ledger Printed in QuickBo0ks
● Go to your QuickBooks.
● Click on print report.
● Choose the year and month accordingly.
● For printing the whole page, do not write anything in the account range area.
● Type the initial and ending A/c numbers if you’re willing to print the range of
accounts.
● Keep in mind that the report is not time bound.
● Lastly, Click on Print.
How to Look at General Ledger in QuickBooks Desktop?
To look for the general ledger in the QuickBooks desktop make sure you execute the
General Ledger Report.
And you can do this through the Reports Menu.
Adhere to the instructions given below to look for the general ledger in QuickBooks
Desktop.
● Open your QuickBooks desktop.
● Click on the reports menu.
● Select the Accountant and Tax tab.
● Select the general ledger.
● Customize your report and then go to Display.
● Finally, click on “Ok” two times.
How General Ledger Can be Used in QuickBooks Online?
The General Ledger reports can be used in any edition of QuickBooks. But don’t forget to run the report to look at the general ledger.
Based on the time duration select the range of dates for viewing the details.
Follow the instructions given below for using the general ledger in QuickBooks Online:
● Firstly open the Report menu.
● Click on the standard option.
● Click on the my accountant option twice.
● Double click on the General ledger.
● Choose the range of dates.
● In case you are interested in altering the data, select customize.
● You get a choice between the cash or accrual basis.
● Lastly, Click on Run report.
Once you are done with the steps listed above, the General ledger report will appear. And you can look for the required details via QuickBooks desktop. Numerous General ledger accounts are provided with some specific General ledger
codes. These accounts help you to structure the General ledger accurately.
Conclusion
As of now we expect that you must have gained a complete knowledge of QuickBooks
General Ledger from the beginning of the article to its end. And we anticipate that the aforementioned instructions or methods will be helpful for you in resolving any sort of errors or issues effectively. But still if any user experiences any kind of issue related to the QuickBooks General Ledger can openly contact our team.
