Resources
General ledger: tracing balances to business records
The general ledger organizes transactions by account. Use it as a path back to the invoices, receipts and entries behind a balance, especially when a summary report raises a question.
This guide describes common bookkeeping practice, not a legal or regulatory requirement.
Last reviewed:
General information, not legal or tax advice.
Move from a document to a journal entry
Publication 583 describes a journal as the record of transactions supported by business documents. Start with the original invoice or receipt, then locate the corresponding entry. Preserve enough description to identify the business purpose without relying on the preparer’s memory.
Sources: IRS Pub 583
Read the account’s transaction history
The IRS describes the ledger as account-organized totals from journals. Review the beginning balance, posted activity and ending balance together. As practical review steps, look for repeated entries, unexpected payees and corrections that lack an explanation before accepting the final total.
Sources: IRS Pub 583
Understand the built-in balance check
Double-entry records a debit in one account and a credit in another. Publication 583 contrasts that system with simpler single-entry records. The balancing mechanism helps with arithmetic, but account selection still needs review; a payment can balance while being assigned to an unsuitable category.
Sources: IRS Pub 583
Keep electronic detail available for verification
IRS guidance requires legible computerized records that support return entries, reconcile with the books and return, and identify source documents. Preserve exports and attachments in a usable form. A summary dashboard alone may not explain an individual entry when your CPA requests supporting detail.
Sources: move from a document to a journal entry
Find the documents behind a balance
Tidwell helps reconcile the books and organize supporting schedules for your business decisions. We work with your CPA on tax questions and the financial records they need.