Which of the following is incorrect regarding the scope of general ledger accounting?

The statement that reports solely on external accounting is incorrect because general ledger accounting serves a dual purpose, providing information useful for both external and internal reporting. While a significant portion of general ledger data is indeed used for external financial reporting—such as compliance with laws and regulations regarding financial statements—it also supports internal management reporting needs.

General ledger accounting captures comprehensive information about all financial transactions, and these records are integral for internal decision-making processes, budgetary controls, and performance assessments. Managers utilize this data to analyze costs, revenues, and profitability, which is essential for strategic planning and operational management. Therefore, the incorrect assertion that general ledger accounting is exclusively for external purposes overlooks its broader role in supporting management functions within an organization.

In contrast, the other statements correctly reflect the nature of general ledger accounting; it does detail individual business transactions, is focused on legal reporting requirements, and is not solely intended for internal management, as it serves multiple stakeholders.