What is a General Ledger?

The general ledger is one of the most important documents divorce forensic accountants request when there is a business involved.

The general ledger aka the "GL" is a comprehensive document that contains details that support the numbers in the financial statements. These documents are big, and can often be several thousand pages.

Having the GL is crucial when we need to comb through the books to determine true business and personal income. For example, if you see "Travel and Entertainment" in the financial statements for $10k, the GL SHOULD (often doesn't) contain the individual line items that comprise the $10k.

Its important to understand the limitations of the GL. While they are useful, they are still a document prepared by an individual (sometimes even the divorcee themselves).

If someone is in charge of both the books and the banks, they could, in theory write a check for a private jet, and book it to equipment purchases in the GL. Therefore, a GL will never give you the same level of assurance a bank statement would.

That said, looking at each and every bank transaction/check image for a company and reconstructing the books is not always practical.

Think of the GL as the roadmap.

If you have the GL, you can review the details to see if anything looks off. If you see something, you can then request backup, or research those specific items with other information obtained.

PS, always try to get GLs in Excel format! You can thank me later!