Difference between revisions of "Reconcile a General Ledger Account"
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The general ledger is where all of the business's transactions and expenses are recorded. Good accounting practice requires that the general ledger be "reconciled," or checked for accuracy, on a regular basis. Additionally, because the general ledger is the source of information for the four financial statements (the balance sheet, income statement, statement of cash flows, and statement of shareholder's equity), reconciliation can refer to cross-checking the balances on these statements with those in the general ledger. Reconciling the general ledger can be useful in preparation for an annual audit or can simply be used to ensure that a business owner is getting an accurate picture of the business's financial health.<ref name="rf1">http://www.accountingtools.com/questions-and-answers/how-to-reconcile-the-general-ledger.html</ref> | The general ledger is where all of the business's transactions and expenses are recorded. Good accounting practice requires that the general ledger be "reconciled," or checked for accuracy, on a regular basis. Additionally, because the general ledger is the source of information for the four financial statements (the balance sheet, income statement, statement of cash flows, and statement of shareholder's equity), reconciliation can refer to cross-checking the balances on these statements with those in the general ledger. Reconciling the general ledger can be useful in preparation for an annual audit or can simply be used to ensure that a business owner is getting an accurate picture of the business's financial health.<ref name="rf1">http://www.accountingtools.com/questions-and-answers/how-to-reconcile-the-general-ledger.html</ref> | ||
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==Steps== | ==Steps== | ||
