5: The Ledger and its Division

Question 1

Ledger

Answer 1

the book in which accounts are kept

Question 2

Three reasons why the ledger is divided

Answer 2

1. only possible for one person to use the book at a time
2. can allow specialisation allowing individuals to focus on their own part own the system leading to accurate and efficient keeping
3. greater security, less risk of fraud

Question 3

What are the five divisions main divisions of the ledger

Answer 3

1. cash book
2. sales (trade receivables) ledger
3. purchases (trade payables) ledger
4. nominal ledger
5. general ledger

Question 4

Cash book ledger

Answer 4

all accounts relating to cash

Question 5

Sales ledger

Answer 5

accounts of all the businesses trade receivables

Question 6

Nominal ledger

Answer 6

accounts of revenue and expenses (sales revenue, rent)

Question 7

General ledger

Answer 7

remainder of business accounts, mainly NCA and long term finance