A General Ledger and a General Journal sound very similar and can be easy to mix up if you are new to bookkeeping. Both are crucial for keeping your books balanced and maintaining records of your financial transactions, so it is important to be knowledgeable on what they are, what they do, and when to use them.
The General Ledger
Your General Ledger is a place to house records of all financial transactions by account and chronological order. In the General Ledger you will find a list of all the accounts within your Chart of Accounts, these accounts will be in the same order as within the Chart of Accounts and will feature all the transactions involving the specified account in chronological order. Financial transactions are posted in the General Ledger after being posted in either the General Journal, Sales Journal, Cash Receipts Journal, Cash Disbursements Journal, or Purchases Journal.
The General Journal
Your General Journal is a place to house records of some financial transactions in chronological order. In this Journal you will find transactions such as payroll, transactions involving shareholders, and account reconciliation adjustments. The only transactions which are not found in the General Journal are transactions which are sales (both on terms and immediate), or purchases (both on terms and immediate). These transactions will be found in your Sales Journal, Cash Receipts Journal, Cash Disbursements Journal, or Purchases Journal.
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