One record, many accounts
Your chart of accounts is the list of accounts. The general ledger is where those accounts hold activity. Cash, equipment, a loan, sales and office costs each have a page, and every journal entry lands on at least two of them. Add up the pages and you have the figures behind the balance sheet and the income statement.
Think of it as the layer that sits between individual transactions and finished reports. A report tells you a balance. The ledger tells you which entries produced it, which is what you need when a number looks wrong.
Subledgers hold the detail
Receivables and payables usually have detail that does not belong in the main ledger: which customer owes what, which supplier bill is due. Accounting software keeps that detail in a subledger. The general ledger holds one control account for each, such as accounts receivable, and its balance should equal the total of the subledger.
When the two disagree, something was posted to one side only. A manual entry made directly to the control account is a common cause, because the subledger never hears about it.
An illustrative example
Suppose a business invoices a customer $2,000 in March. The sale is recorded as an increase to accounts receivable and an increase to sales. In April the customer pays. The ledger then shows cash going up by $2,000 and accounts receivable going down by the same amount. The sales account is not touched again. The figures are round and ignore sales tax so the movement is easy to follow.
Looking at the receivable account alone, you can see the invoice and the payment on separate dates. That history is what lets you confirm the customer really paid, rather than assuming it from the bank balance.
Keeping it trustworthy
The Canada Revenue Agency expects records to support the income and expenses you report, and describes accounts and books as part of what counts as a record. Computerized records need to be clear and easy to read. Generally, required records and supporting documents are kept for six years from the end of the last tax year they relate to, which for a corporation is its fiscal period.
Ask your accountant who may post entries, how corrections are made, and whether past periods are locked once they are closed. Keep the ledger export for each year end with the supporting documents, so you can show how a number was built if you are ever asked.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- Business recordsCanada Revenue Agency
- Where and how long to keep recordsCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.