Reading the General Ledger
The GL is the source of truth. Learn to read it, scan for anomalies, and trace any number back to its origin.
Anatomy of a GL report
The general ledger lists every transaction in every account over a period. Each line shows date, description, debit or credit amount, and running balance. If a number on a report looks wrong, you trace it here.
What to scan for
Round numbers in operating accounts (often estimates that need replacing), entries to suspense or 'Ask My Accountant' accounts, and duplicate amounts on the same day across accounts.
Tying to the bank
Cash account in the GL should agree to your bank statement after reconciliation. Any unreconciled item over 30 days old is a problem that compounds.
Key takeaways
- The GL is the source of truth; reports are summaries.
- Scan for round numbers, suspense accounts, duplicates.
- Old unreconciled items get worse with time.