What are general ledgers ?
General ledgers are records that contains all transactions of a business relating to the firm's revenues, expenses, assets, liabilities and the shareholder's equity. General ledger or GL is divided into two categories ie debits and credits. It contains both financial as well as non-financial data.
How to reconcile general ledgers ?
Reconciliations are comparisons between two separate reports or documentations. The process is performed to minimise errors. It means reconciliationof accounts such as accounts payable and cash.
The process is nothing but a business' internal controlling mechanism that identifies mistakes and errors.Theprocess make a business' financial statements accurate.
Follow steps below to perform reconciliation of general ledgers.
• The first step towards reconciliation is to be familiar with all balance sheet accounts. Businesses reconcileon a monthly basis, all balance sheet general ledger accounts such as fixed assets, accounts payable, receivable, cash, investments and inventories. In banks, cash and investments are reconciled to bank and a brokerage company's statements. In inventory, an inventory count and valuation can be performed at least once every year.
• It is imperative to know your revenue statement general ledger accounts. Businesses reconcile their income statement accounts like for example they compare the internal payroll expenses each quarter or each year with external payroll statements. Businesses also reconcile other expenses such as rent and other bills by comparing actual bills with ledger amounts.
• The next step is to run a trial balance statement or a balance sheet report to ensure that your general ledger is balanced out. At times, out-of-journal entries are noted unknowingly due to a system error or by a human error. Systems often enable you to identify out-of-balance transactions while some systems will allow you to export the journal entries to excel and further will allow you to analyse errors in excel.
For more on general ledgers, call us at +91 8459136607 ; +91-9717771415 or e-mail at info@boundlessindia.comor visit us at http://www.boundlessindia.com
General ledgers are records that contains all transactions of a business relating to the firm's revenues, expenses, assets, liabilities and the shareholder's equity. General ledger or GL is divided into two categories ie debits and credits. It contains both financial as well as non-financial data.
How to reconcile general ledgers ?
Reconciliations are comparisons between two separate reports or documentations. The process is performed to minimise errors. It means reconciliationof accounts such as accounts payable and cash.
The process is nothing but a business' internal controlling mechanism that identifies mistakes and errors.Theprocess make a business' financial statements accurate.
Follow steps below to perform reconciliation of general ledgers.
• The first step towards reconciliation is to be familiar with all balance sheet accounts. Businesses reconcileon a monthly basis, all balance sheet general ledger accounts such as fixed assets, accounts payable, receivable, cash, investments and inventories. In banks, cash and investments are reconciled to bank and a brokerage company's statements. In inventory, an inventory count and valuation can be performed at least once every year.
• It is imperative to know your revenue statement general ledger accounts. Businesses reconcile their income statement accounts like for example they compare the internal payroll expenses each quarter or each year with external payroll statements. Businesses also reconcile other expenses such as rent and other bills by comparing actual bills with ledger amounts.
• The next step is to run a trial balance statement or a balance sheet report to ensure that your general ledger is balanced out. At times, out-of-journal entries are noted unknowingly due to a system error or by a human error. Systems often enable you to identify out-of-balance transactions while some systems will allow you to export the journal entries to excel and further will allow you to analyse errors in excel.
For more on general ledgers, call us at +91 8459136607 ; +91-9717771415 or e-mail at info@boundlessindia.comor visit us at http://www.boundlessindia.com
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