Journal vs general ledger
Each, defined
Journal
Journal — The chronological record of entries, before they are summarized by account.
General ledger
General ledger — The complete set of accounts, holding every posted entry.
Side by side
| Journal | General ledger | |
|---|---|---|
| Organized | By date, by entry | By account |
| Unit | A complete, balanced entry | An account's movements and balance |
| Also called | Book of original entry | Book of final entry |
How they relate
Every line is written once, in the journal, and posted to the ledger. The journal answers 'what happened on the 14th?'; the ledger answers 'what is in accounts receivable?'.
Modern software posts automatically, so the two are views of one table. The distinction still matters when tracing a balance back to the entries that built it.
Questions
- What connects the journal to the ledger?
- Posting: copying each journal line to its account in the ledger.
- Where does the trial balance come from?
- From the general ledger, by netting each account's balance onto one side.
See it computed
Worked through: the calculators, the journal entries and the tools that use these terms.
- Journal entry for a sale on accountFor a sale on credit, debit Accounts receivable and credit Revenue for the price; under a perpetual inventory system also debit Cost of goods sold and credit Inventory for what the goods cost. When the customer pays, debit Cash and credit Accounts receivable.Entry
- Journal entry for accounts payableWhen an approved vendor bill is entered, debit the expense or asset it bought and credit Accounts payable. When it is paid, debit Accounts payable and credit Cash.Entry
- Journal entry balancerPaste an entry, see the out-of-balance, and copy an import-ready CSV.Tool
Definitions are the glossary’s, generated from the same documents. Figures in the examples are computed by tested functions, not typed. General information for US companies under US GAAP, not accounting or tax advice.