what is a gl account

A General Ledger (GL) is a bookkeeping ledger in which accounting data are posted from journals and aggregated from subledgers, such as accounts payable, accounts receivable, cash management, fixed assets, purchasing, and projects. A GL is a means for keeping a record of a companys total financial accounts, and it is the basis of its financial reporting and the source of the information used therein. GL accounts are used to categorize types of financial transactions, and each account is a unique record summarizing a specific type of asset, liability, equity, revenue, or expense. A ledger account is created for each account in the chart of accounts for an organization and is classified into account categories, such as income, expense, assets, liabilities, and equity; the collection of all these accounts is known as the general ledger. GL accounts are arranged in the general ledger and are usually divided into at least seven main categories: assets, liabilities, equity, revenue, expenses, gains, and losses. GLs are 6 digits long, and each digit provides information. Revenue postings start with 4, expense postings start with 5, and a GL that starts with an 8 is a transfer of funds from one area to another. Certified public accountants (CPAs) and bookkeepers typically access and use general ledgers.