Question

why is journal sub divided? Name the special journals generally maintained by the business and state the types of transactions entered in each of them

Answer 1

Definition of Subdivision:In a large business concern a journal is divided into parts so that several clerk could work at the same time. This is known assubdivision of journal.Purpose of Subdivision:In small concerns only one journal and one ledger may serve the purpose, because the number of transactions is very small. But in large business concerns the number of transactions are numerous, just one journal and one ledger will not do the job. That will cause much inconvenience i.e., if we have only one journal in a large scale business, it is not possible for one bookkeeper to record all the transactions in time. On the other hand, it will not be possible for more than one person to use the same journal simultaneously with the result that the accounting work will fall in arrear.There are some more factors which necessitate the use of more than one subsidiary book (journal):1.If all the transactions are recorded in one book (journal), the book will be very large, bulky, and difficult to handle.2.If one bookkeeper is asked to record all the transactions, the possibility of errors and mistakes will be great. It will also create opportunities for committing fraud.3.If all the transactions are recorded in one book, it will be difficult to trace out a particular transaction in future

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