Accounting & tax
General ledger
The complete classified record of a rental business's financial transactions, organized by account and supported by dated source entries.
Glossary
Accounting & tax
Primary references on this page:
·
IRS Publication 538: accounting periods and cash or accrual methodsA general ledger is the accounting record that groups every posted financial transaction into accounts such as rent income, repairs, cash, deposits held, payables, debt, and owner equity. Unlike a bank statement, it records what a transaction represents. Unlike a tenant ledger, it covers the property or rental business as a whole rather than charges and payments for one resident account.
Each ledger entry should carry a date, account, amount, property or unit when relevant, description, and link to its source document or subledger. Under double-entry bookkeeping, each transaction affects at least two accounts so the books remain in balance. Even when a small landlord uses simpler software, the same control matters: a bank feed suggestion is not a final classification until someone verifies the property, purpose, and supporting record.
Suppose an owner pays a $1,200 plumbing invoice from the rental checking account. The general ledger records the decrease in cash and classifies the other side according to the actual work and accounting policy, with the invoice attached to the correct property. If a tenant later reimburses $200 for a separately documented responsibility, that receipt receives its own entry; editing the original invoice down to $1,000 would erase the real sequence.
Watch for uncategorized transactions, duplicate bank-feed imports, personal activity mixed with property activity, and totals that do not reconcile to subledgers or bank statements. Close each period by resolving exceptions and preserving adjustments rather than overwriting history. The general ledger is the source for financial statements, but its output is only as reliable as the classifications, cutoff dates, and reconciliations behind it.
Posting chain and worked entries
A reliable ledger preserves source event, journal entry, account, property, period, and support. Tenant, deposit, payable, and asset subledgers reconcile to controls.
Example: a $1,200 receipt may debit cash and credit receivables. A $25 processor fee is a separate expense and clearing entry. Batch, deposit, allocation, and journals should reproduce one another.
Corrections and close checklist
Correct errors with dated, authorized adjustments or reversals that retain the original. Deleting history breaks lineage.
How rental activity reaches general-ledger accounts
A journal entry records one economic event as balanced debits and credits; posting places those lines into general-ledger accounts. The chart of accounts supplies the account names and hierarchy, while property, legal entity, unit, vendor, tenancy, and project dimensions answer where the activity belongs. An operator should be able to move in both directions: from an owner-report total down to entries and supporting documents, and from a source event forward to every report it affected.
There is no single chart or posting structure that fits every owner, entity, or accounting basis. A management company may keep client liabilities and management-fee revenue that a self-managing owner does not. The control objective is a documented, consistent structure that keeps entities and properties separate and can be reconciled.
Posting date, economic period, and accounting method
The transaction date, bank date, invoice date, posting date, and economic period can differ. A December repair invoice received in January creates a cutoff question: a cash-basis operational view may follow payment, while an accrual view may recognize an incurred obligation in December. IRS Publication 538 explains tax accounting periods and cash and accrual methods, but it does not prescribe one universal property-management ledger. The owner or entity’s adopted method and qualified accounting guidance control.
Changing a posting date to improve a month’s appearance is not a correction. A cutoff decision should identify the source event, applicable method, affected period, approver, and any owner statement or tax workpaper that must be regenerated.
Exception diagnosis and supported correction
Start with the failed assertion instead of posting a plug. A duplicate entry fails existence; the wrong property fails dimensional accuracy; a December invoice posted to January may fail cutoff; a roof coded to repairs may fail classification; a tenant subledger that does not equal its control account fails reconciliation. The corrective path is different for each.