What should a checklist for reviewing the general ledger contain?

What does a general-ledger review check, and what does it produce?

The trial balance, the financial statements and the tax return are all drawn from the general ledger, so a ledger review examines the ledger's own structure, entries and balances. OpenStax's Principles of Accounting, in its trial-balance section, warns that books can have errors and still be mathematically in balance. Agreement between ledger and trial balance shows only that the software added up, not that the entries are right.

The review produces a list of accounts and entries needing correction or explanation, each with an owner and a disposition. It confirms that account reconciliations were performed and what they showed, without redoing them.

How do you set the scope and order of the review?

The reason for the review sets its population, its depth and what counts as an exception.

Note which system the ledger comes from, since it decides what entry details and user history you can test. Run the checks in one fixed order (structure, integrity, balances, entries, cutoff, coding, support), because a partly posted ledger makes every later observation provisional. Save report names, filters and date ranges with the results so the next review reruns the same populations.

Do not rank accounts by size and stop partway. The FASB's Concepts Statement No. 8 cautions that magnitude by itself, without regard to the nature of the item, is generally not a sufficient basis for a materiality judgment. An account that should hold nothing but does is a finding at any amount.

What goes on the checklist?

Use your system's equivalent of each report.

Which chart-of-accounts conditions are defects rather than preferences?

Test the chart as it is used. A condition is a defect when it sends transactions to the wrong place every period until fixed; numbering, naming style and level of detail are preferences. Four conditions are defects:

• Wrong account type. Intuit's QuickBooks Online help on account and detail types (updated August 5, 2026) calls the account type the most critical selection because it dictates how QuickBooks classifies data for financial reporting. An asset held in an expense account lands on the wrong statement.
• Duplicates. Two accounts used for one purpose split a figure between them, so neither is right.
• Retired accounts still receiving entries. A posting to an account the business stopped using is miscoded or placed where nobody looks.
• Misleading names. A name that describes something other than the contents leads the next person to code there wrongly.

An account with no activity is not a defect in itself, but an entry that suddenly lands in one is screened in the entry review below. Redesigning the chart is a separate task.

What do the integrity checks show when they fail?

These checks bound everything the review can conclude, so run them before looking at any balance:

• Fully posted. Sage's help for Sage 50 U.S. 2026 (published June 17, 2026), on batch, SmartPosting and real-time posting, explains that in batch posting, entered transactions are saved to a temporary holding area for review before the batch is posted to the General Ledger. Anything still held, drafted or awaiting bank-feed review is outside the ledger.
• Debits equal credits. A failure means nothing in the ledger can be relied on until the cause is traced, which is a separate procedure.
• Ledger agrees to the trial balance. Run both for the same dates and basis. A difference that survives identical settings is a data problem to trace first, while agreement proves only that the reports were run alike.
• Nothing outside the period. Each account opens at the balance your last review accepted, allowing at a fiscal-year start for the year-end close. Any other difference, net of corrections already in the log, means someone added, changed or deleted an entry in a reviewed period. An entry with a mistyped date falls outside the period and escapes every other check.

Which balances are exceptions in themselves?

These conditions are findings at any amount, and no agreement-based check surfaces them:

• Wrong sign. AccountingTools' article on normal balances says the normal balance helps detect accounting errors by showing when a balance appears on the wrong side. It notes that a contra account's normal balance is the reverse of its class, so contra accounts are the only exception. Every other reversed balance needs an explanation, including a credit balance in cash, which the same article gives as an example of an abnormal balance (an overdrawn account).

• Suspense, clearing and uncategorized accounts. AccountingTools' article on suspense accounts says all suspense items should be researched and eliminated by the end of the fiscal year. Intuit's QuickBooks Online help on default and special accounts (updated August 3, 2026) says Uncategorized Income and Uncategorized Expense are created automatically and track money that still needs to be categorized. The same page lists Uncategorized Asset, Undeposited Funds and Reconciliation Discrepancies; in QuickBooks Online, include them in the parking-account check.

  Review every item that passed through in the period, not only the ending balance, because an item can be parked and then cleared to the wrong account.

• Opening balance and equity accounts. The same Intuit page calls Opening Balance Equity the default account for adjustments. Trace every entry to it, and every equity entry other than owner contributions, draws and the year-end close; the coding check on owner transfers covers contributions and draws.
• Control accounts. OpenStax's Principles of Accounting, in its subsidiary-ledger section, explains that the receivables subsidiary ledger must agree with the receivables control account, which helps find mistakes. Confirm the tie-out for each control account was done at the review date and any difference explained; performing it belongs to the close.
• Accounts that never move or move unexpectedly. An account the business posts to every period (depreciation, accruals or payroll liabilities where these are recorded each period) that has not moved has missed its entries, and a quiet account that suddenly moved sends you to its entries. Judge movement by the period's debits and credits, not by the change in balance.

Which entries beneath the balances need a closer look?

Two wrong entries that offset inside one account leave a correct balance, so reviewing balances alone cannot see them. The PCAOB's fraud standard, AS 2401, lists characteristics of inappropriate journal entries that make a practical screen:

• Entries made to unrelated, unusual or seldom-used accounts
• Entries made by people who typically do not make journal entries
• Entries recorded at the end of the period, or after closing, with little or no explanation or description
• Entries containing round numbers or a consistent ending number

Add every manual journal entry, since it bypasses the invoice, bill and payment records that would otherwise support it; entries made at unusual times; every entry in the period with no description; and every entry with no attachment where the business attaches documents in its system. For who made an entry and when, use the system's history: Intuit's QuickBooks Online help on the audit log (updated August 4, 2026) says the log gives a detailed trail of who made changes and what actions they performed, can be filtered by user, date or event, and can find deleted transactions. List deletions since the last review and treat each as an exception to explain. The page adds that viewing the log needs admin access, and that automatic changes appear under Online Banking Administration or System Administration, and support consultants' changes under Support Representative. Review those profiles as their own group; without admin access, record that the user, timing and deletion screens could not be run.

AccountingTools' article on reversing entries warns that it is extremely easy to forget to manually reverse an entry in the following period. Match every period-end accrual with its reversal, especially those meant to be reversed by hand: an accrual left in place counts the expense twice once the bill is entered.

How do you check cutoff at ledger level?

Cutoff depends on the basis the books are kept on. IRS Publication 538 says that under an accrual method you generally report income in the year it is earned and deduct or capitalize expenses in the year incurred; under the cash method you include income actually or constructively received during the tax year and generally deduct expenses in the tax year you actually pay them.

Test entries dated in the days either side of each period end against the basis. On the accrual basis, work done before the period end must be recorded in that period, by a bill dated in it or by an accrual; a later-dated bill with no accrual behind it is an exception, as is income recorded before it was earned. On the cash basis, Publication 538 says checks cannot be held to postpone income to a later tax year, so a check received before period end belongs in that period even if deposited after; it also says an expense paid in advance is deductible only in the year it applies to, unless it qualifies for the 12-month rule, so refer year-end advance payments to whoever prepares the return. Rent entered twice in one month and missing from the next passes every arithmetic check, so scan recurring charges month by month.

How do you test coding consistency?

The FASB's Concepts Statement No. 8 describes consistency as the use of the same methods for the same items, calls comparability the goal that consistency helps achieve, and says different things must look different. At ledger level, the same kind of transaction belongs in the same account all period. Sort ledger detail by payee or description for recurring items such as rent, software, utilities and owner transfers, and list every payee coded to more than one account, then check whether the split follows a real difference in what was bought or paid; a payee supplying different things is correctly split. Compare early and late months too: a convention changed part-way makes both halves of the period, and comparisons with earlier periods, wrong while each entry looks defensible. Record the convention that applies from now on alongside any reclassification.

How do you test that entries carry retrievable support?

Test support rather than assume it. The IRS's small-business page on what records to keep says supporting documents are kept because they support the entries in your books and on your tax return, and that documents for business expenses should identify the payee, the amount paid, proof of payment and the date incurred, and include a description of the item or service that shows the amount was for a business expense. It adds that several documents may be needed, and that documents for gross receipts should show their amounts and sources.

Select every flagged entry, every manual journal entry and a random handful of the rest. Retrieve each document yourself from where it is stored and check it against the entry's date, amount, payee and account; for a payment, look for proof of payment; for an expense, a description of what was bought showing it was a business cost; for income, the amount and source. A manual journal entry also needs a written reason and the calculation or document behind it. An entry nobody can explain or support is an exception at any size.

What changes when rules or bank feeds created the entries?

Rule-created and feed-posted entries exist without anyone deciding each one, so the review targets what the automation coded and what a person overrode. Intuit's QuickBooks Online help on bank rules (updated September 11, 2026) says rules enter categories and descriptions into transactions for you; with auto-add turned on, QuickBooks applies the rule to any downloaded transaction it applies to and posts it immediately, and a RULE badge appears in the Category field once a rule is applied. Add three checks:

• List every active rule and test its conditions and account against a few transactions it caught, since one wrong rule miscodes every match all period.
• Review auto-posted entries as their own population, because nobody looked at them before they reached the ledger. Intuit's bank-rules help says these carry an AUTO badge, and the Bank transactions list can be filtered to Rules, No rules or Auto-post rules.
• Review entries whose rule-assigned or suggested category someone changed, using the transaction's edit history where the system keeps one, and every item the automation left uncategorized.

What changes when you did not build the ledger?

Open with a baseline before treating any difference as an exception:

1. Agree the opening balances to records that do not depend on this ledger: prior reviewed statements and, for bank, card and loan accounts, the reconciliation at the start date. Confirm that it exists and what it showed; if none exists, log an exception for the close rather than posting a difference to Opening Balance Equity.

2. Confirm the basis the books are kept on, then check how invoices and bills open at the start date were brought in.

   On the accrual basis they belong in opening receivables and payables, because their income and expense fell in the earlier period; one re-entered as a new invoice or bill dated inside the period counts that income or expense twice. On the cash basis they are listed, not posted as opening balances, and reach income or expense when paid; one posted to receivables or payables against Opening Balance Equity never reaches income or expense when it is collected or paid.

3. Note each account's purpose as the previous bookkeeper used it.
4. Record the coding conventions you find and confirm them with the owner or previous bookkeeper before calling a departure from your own habits an error.

If the basis differs from the one earlier returns used, opening items can be counted twice or not at all; raise it with whoever prepares the return before going further.

How is each exception recorded, owned and re-checked?

Log each exception on one line with the account or entry, the check that raised it, the amount, what was found, the owner, a due date and the disposition. Each exception closes in one of three ways.

Where staffing allows, someone other than the person who posted an entry clears its exception; in a one-person business, write the explanation down anyway so it can be checked later. Start each review from the previous log: re-check open items first, and compare new exceptions with cleared ones so a returning item meets its recorded explanation. With the same populations, reports and order each time, exception counts per check can be compared between periods, and a rising count of uncategorized items or manual entries is itself a finding.