The document discusses the general ledger's role in accounting, emphasizing that balance sheets are not created after every transaction, but rather at the beginning and end of a period. It explains that the general ledger comprises various ledger accounts for all financial records of a firm. Additionally, it outlines the process of recording financial transactions within these accounts.

1. 4.1
THE GENERAL LEDGER

2. Video of this presentation at…
YouTube Channel for VCE Accounting

3. © Michael Allison. Author’s permission required for external use.
 In Chapter 2, after every transaction that occurred a new Balance Sheet was
prepared…
4.1 THE GENERAL LEDGER
Transaction #1 Transaction #2
Balance Sheet #1 Balance Sheet #2
Transaction #3 Transaction #4
Balance Sheet #3 Balance Sheet #4
Transaction #5 Transaction #6
Balance Sheet #5 Balance Sheet #6

4. © Michael Allison. Author’s permission required for external use.
 The Balance Sheet can’t be prepared and balanced after every transaction
that occurs as this is unnecessary and time-consuming
 Instead, the Balance Sheet is prepared at the beginning and at the end of the
period
4.1 THE GENERAL LEDGER
1 July 31 July
Balance Sheet Balance Sheet
 Where will the transactions be recorded in between these dates?
 In the General Ledger…
?

5. © Michael Allison. Author’s permission required for external use.
 The General Ledger is made up of many Ledger Accounts (also called just
Ledgers)
 These look like a T…
Account Name (e.g. Cash at Bank)Account Name (e.g. Cash at Bank)
This side is called the...
DEBIT side
Account Name (e.g. Cash at Bank)
This side is called the... This side is called the...
DEBIT side CREDIT side
4.1 THE GENERAL LEDGER

6. © Michael Allison. Author’s permission required for external use.
 Every single item in the firm’s records will have a Ledger Account – e.g. there
will be a ledger account for:
Cash at Bank [A] Debtors [A] Stock [A] Premises [A]
Loan [A] Creditors [A] GST Clearing [A] Capital [OE]
Rent [E] Wages [E] Insurance [E] Drawings [-OE]
Cost of Sales [E] Sales [R] Vehicles [A] Computers [A]
4.1 THE GENERAL LEDGER

7. © Michael Allison. Author’s permission required for external use.
 Collectively, all of the Ledger Accounts are called the General Ledger
4.1 THE GENERAL LEDGER
The General Ledger
Cash at Bank [A] Debtors [A] Stock [A] Premises [A]
Loan [A] Creditors [A] GST Clearing [A] Capital [OE]
Rent [E] Wages [E] Insurance [E] Drawings [-OE]
Cost of Sales [E] Sales [R] Vehicles [A] Computers [A]

8. © Michael Allison. Author’s permission required for external use.
 Process for recording financial transactions…
4.1 THE GENERAL LEDGER
Transaction #1
Transaction #2
Transaction #3
Transaction #4
Transaction #5
Transaction #6
Transaction #7
Transaction #8
The General Ledger
Ledger Ledger Ledger
Ledger Ledger Ledger
Ledger Ledger Ledger
Ledger Ledger Ledger
Balance Sheet

9. © Michael Allison. Author’s permission required for external use.
TASK
In-class Homework
SQ1 X