General accountancy refers to the process of making financial reports on a company’s general activities, as opposed to the internal details of the company. General accounts include all transactions, and all records and statements concerning them. General accountancy involves not only financial records but also internal policies and procedures that govern the activities of a company and its employees.
General accountancy work involves managing cash flow, budgeting, and forecasting and recording all financial activity. The accountant manages the cash flow by analyzing cash flows between and among various transactions, projects, assets, liabilities, and equity.
General accounts can be further divided into two major categories: general ledger books. General ledger books keep all financial transactions, while general ledger books (often referred to as books of accounts) keep general ledger transactions. General ledger accounts consist of bills, notes, debentures, security instruments, securities, and other receivables, payables, and investments. General ledger books are usually divided into a variety of types of accounts. General ledger accounts are classified as follows:
If you are an accountant who wants to specialize in general accounts, then there are two general types of accounts in general ledger books. There are general ledger accounts held by an agency of the government (e.g., the Department of Revenue), and there are general ledger accounts held by private companies (e.g., banks). Other types of general ledger accounts include accounts held by nonprofit organizations and accounts maintained by non-government entities such as public utilities. Some accounts may also be held by government agencies, but usually, these accounts are not recorded as general ledger accounts.
The purpose of general accounts is to provide a record of financial transactions. Because general accounts record transactions in general terms, they are often used for tax purposes, as well.
Although general accounting is a very important part of the process of maintaining general accounts, general ledger books are not considered part of the financial records of a company. Because general accounts records are not part of the actual bookkeeping process of the company, they are considered private records of the company. General ledger books are considered part of the internal accounting process and are not subject to the same public disclosure laws as company books.
General ledger books also cover a variety of other aspects of a company’s operations. These aspects include: inventory control, cash flow analysis, profit and loss analysis, balance sheet preparation and reconciliation, and financial statement preparation. General ledger books must be prepared by accountants who are specialized in general accounts. General accountants must also meet the requirements of the government’s General Accountant Code of Ethics.
General ledger books are generally required by state law. Some states do not require general accounts, but many require some type of general ledger. A few states require the accountants to make a personal guarantee with the state as a condition of doing business with the state.
The first step in preparing general ledger books is to complete the preliminary bookkeeping records. An accountant will create a general ledger account file for each activity and include a detailed description of the transaction involved.
The next step is to prepare and maintain general ledger files. This includes a summary of the information entered in general ledger accounts and a summary of the income and expenses incurred during the year. The accounts must be filed with the state as soon as they are prepared.
A general accountant is called upon to produce general ledger accounts at a quarterly or annual meeting of the board of accountancy of the company. General ledger books are also called journals of the general ledger accounts of the company. General accountants record the following information into general ledger files: total assets, total liabilities, and total revenue. The general ledger file is prepared after the records are prepared by the general accountant.