General Ledger Accounting is essentially functions as a complete record for all financial business transactions. All business transactions that have financial impact are posted to the appropriate general ledger account. On my opinion, SAP is the best ERP business software in the world. All components are fully integrated. The general ledger accounting of the system receives automatically all financial transactions from other component i.e. SD, MM, PS through account determination. 

General Ledger Master Data

• G/L master data pertains to information on G/L accounts which remain unchanged over an extended period of time;
• Master Data vs Transaction Data – The former refers to information which remain unchanged over an extended period of time. Master data controls how data are entered and processed. Whereas, transaction are linked and managed using master data.

Chart of Accounts

•  Chart of accounts contains the definitions of general ledger accounts. The definitions consist primarily of the account number, account name, and the G/L account type (BS account or P&L account);
• Do remember that each G/L account is set-up according to a chart of accounts;
• Assignment rule, only one chart of accounts can be assigned to a company code. Multiple company code can use the same chart of account.

General Ledger Master data Segment

Chart of account Segment

• The chart of accounts contains basic information for each of the g/l accounts. The chart of account segment contains g/l account information such as: account number, account name (short text & long text), control fields (whether BS or P&L account), and consolidation fields.

Company Code Segment

• Assignment rule: multiple company codes can use one chart of accounts. Before a company code can use the g/l account the Company Code Segment has to be created. The company code segment information is specific to each company code. Any changes on any of the information on this segment won’t affect the g/l account information on other company codes who are using the same chart of accounts. Information on this segment is unique for each company code.

General Ledger Account Fields

• Chart of Account Segment fields: Name, Control and Consolidation
• Company Code Segment fields: Account Control, Account Management, Document Entry, Bank/Financial Details, Interest Calculation and Joint Venture

Account Group

• Account group is use to manage and organize large number of general ledger accounts. Normally, general ledger accounts with similar business functions are assign in the same account group.
• Example of account groups are: cash accounts, reconciliation accounts, asset accounts, material accounts, revenue accounts and expenses accounts.
• Control can be set-up for each account group so that g/l accounts are not misplaced to other groups. To do that, number range should be assigned to each account group in the configuration.

Reconciliation Accounts

• Reconciliation accounts are general ledger accounts that have subsidiary accounts. Transactions can not be posted directly to reconciliation accounts. All transaction postings must be done through subsidiary accounts and the assigned reconciliation accounts are updated online and seamless. There’s no need to do a month-end reconciliation to tally the balance of reconciliation accounts and its subsidiary accounts.
• Example of account types that should be set-up as subsidiary in the system are Customer accounts receivable (D), Vendors accounts payable (K) and Fixed assets (A).

Bear in mind that all business financial transactions that are not handled by Accounts Receivable, Accounts Payable, and Fixed Asset sub-components of Financial Accounting are posted through general ledger accounting. In short, transactions that are posted through general ledger accounting are those not affecting subsidiary accounts. Example of transactions are month-end and year-end adjustments, customer doubtful accounts, provision for inventory obsolescense, provision for income taxes, and others.