What does a general ledger include?

A general ledger is fundamental to the accounting process, serving as the main accounting record for a company. It encompasses all of a company's accounts, including assets, liabilities, equity, revenues, and expenses. This comprehensive nature allows businesses to track and summarize all financial transactions effectively, providing a complete picture of their financial position.

The inclusion of all types of accounts in the general ledger is crucial for the preparation of financial statements and for maintaining accurate and up-to-date financial records. These records facilitate analytical comparisons, financial audits, and overall financial management, which are vital for each organization’s success.

In contrast, focusing solely on income accounts or liability accounts limits the scope of financial tracking and reporting, making it impossible to capture a complete picture of the company's financial activities. Additionally, accounts of other companies are not included in a general ledger, as it is specific to a particular company’s own financial data.