Specifications

4  Lesson 1 Computer Tutorial 3
TOPIC 1.2
Overview of a general ledger
To record the assets, liabilities, and shareholders’ equity (including revenues and expenses) of
a company in an orderly manner, accounting information is grouped into accounts. For
example, all information relating to changes in cash on hand is recorded in a single account
called “Cash” (or sometimes “Bank”). Most accounting systems, whether manual or
computerized, use numbers to uniquely identify an account. For example, account number
1001 may identify cash, while account number 1070 may identify marketable securities, and
so on. The account numbers used vary from company to company, but a logical numbering
system should always be followed to facilitate grouping and quick access.
A general ledger can be made up of a dozen accounts or as many as several thousand
accounts, depending on the complexity of the company’s financial transactions. A simple
general ledger might contain the following accounts:
Assets
 Cash
 Accounts receivable
 Inventory
 Capital assets
 Accumulated amortization
Liabilities
 Accounts payable
 Notes payable
 Shareholders’ loans
Shareholders’ equity
 Share capital
 Retained earnings
Revenues
 Operating revenue
 Other revenues
Expenses
 Wages
 Rent or mortgage interest
 Amortization
 Other expenses