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For this reason, general ledger is also known as the Principal Book of Accounting System. The general ledger tracks all transactions, helping monitor cash inflows and outflows. This visibility supports better cash flow management, ensuring liquidity is available for operations and growth. Tracking liabilities ensures you know exactly where your debts stand and helps manage

Otherwise, the balances in these accounts would be incorrectly included in the totals for the following reporting period. Closing entries, also called closing journal entries, are entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. In other words, the temporary accounts are