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Books of Prime Entry

Sub Division of the Ledger

All the journals are posted in chronological order and in a classified order into the ledger. It is a book which contains the accounts. It is one of the most important concepts in CMA foundation. Here, we are going to explain the sub-divisions of the ledger.

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Sub-divisions of Ledger

ledger

Practically, ledger can only be divided into two types. One is personal and other is impersonal. Personal is divided into creditors and debtors. While impersonal is divided into cash book and general. 

Personal ledger

There is mainly two types of ledger in the books of accounting. We will start with the personal. This, as the name suggests, is more personal and related to people.

Also, here you will find all the details related to the transactions about the person who is related to units of accounting.

Furthermore, these transactions are also recorded and that is why this is called personal. It is described earlier is further divided into debtors and creditors.

In debtors, the details related to all the transactions about the people to whom the products and goods are sold, cash is gained, etc. are recorded.

Thus, this as the name suggests records the entry of a person receiving the cash. In creditors, the details of all the transactions related to the person involved in the purchasing the goods on credit, paying to them etc are the record

Understand more about Functions and Advantages of Journal here in detail.

Impersonal ledger

Here the details of transactions where people are not involved are recorded. Thus, the details of transactions here are moreover related to incomes, assets, expenses, etc.

So, this is known as the impersonal ledger. Furthermore, the impersonal is divided into cash book and general ledger.

In cash book, all the bank transactions and cash related transactions are recorded. While in the general one all the transactions related to the nominal accounts, real accounts, details of debtors and creditors are recorded.

This is called general because all the general entries are recorded here.  Furthermore, the general is divided into categories namely private and nominal.

In private ledger, all the transactions related to liabilities and assets are recorded. While in nominal all the transactions related to expenses and incomes of a person are recorded.

Advantages of having sub-divisions of the ledger

  • It is easy to divide the work as far as ledger is considered. This helps in maintaining the records efficiently by the concerned employee.
  • As the volume and size are reduced it is easy to handle them.
  • Also, the ledgers are divided which makes the collection of information easy. So, a particular type of transaction can be easily found out.
  • Furthermore, the sub-divisions leads to minimization of the mistakes.
  • Also, it leads to accounting work be done quickly which can be very helpful for the management.

Practice Questions

Q. The details of a transaction of a person are not involved in which type of ledger?

A. Personal

B. Impersonal

C. Nominal

D. Cash ledger

Answer: B. Impersonal ledger

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Sir I’m pursuing b. Com last year student wt i do sir any diploma course any job please tell

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