Q.Explain the sub-division of the Ledger. State two advantages of sub-dividing the ledger.

As a business grows, keeping every account together in one Ledger stops being practical.

The Ledger is sub-divided into the Debtors Ledger (personal accounts of debtors), the Creditors Ledger (personal accounts of creditors), and the General Ledger (all remaining real, nominal and Capital accounts). Two advantages: posting work can be divided among several clerks and done simultaneously, and locating any account b …

As the number of accounts grows, a single Ledger becomes hard to manage — posting slows down, an account takes longer to find, and only one person can work on it at a time. To avoid this, the Ledger is commonly sub-divided into three parts:

1. Debtors Ledger (Sales Ledger) — contains the personal accounts of all debtors, i.e. customers to whom goods have been sold on credit.
2. Creditors Ledger (Purchases Ledger) — contains the personal accounts of all creditors, i.e. suppliers from whom goods have been purchased on credit.
3. General Ledger (Nominal/Private Ledger) — contains every OTHER account: real accounts (Cash, Furniture, Machinery), nominal accounts (Purchases, Sales, Rent, Salaries), and the Capital account.

Advantages of sub-dividing the Ledger

1. Division of work — posting can be shared among several clerks, each responsible for one ledger, and can proceed simultaneously rather than one person handling every account.
2. Quicker location of accounts — a clerk only needs to search within the relevant ledger (say, only the Debtors Ledger for a customer's balance), not the entire set of accounts. …

Students sometimes think sub-dividing the Ledger changes the rules of posting or balancing — it does not; it only changes WHERE (in which phys …