Question

Why is journal sub-dividend?

Answer 1

sub division of journal is done in order to make recording of transactions more convenient. In small concerns like a small sole proprietorship, where ther number of transactions is not much in number, only one journal can be maintained and there will no problem in that. But in case of large companies or partnership, where the volume of transactions is huge, one single journal can create confusions. firstly, the journal will become bulky and clustered with so many transactions that it will become difficult to trace any transactions when needed. Secondly, when the journal is sub divided into different books like purchases, sales, sales returns, purchase returns etc.
the task of recording transactions in one book can be assigned to a particular individual, thus dividing the work load amongst the staff. one person will not be overburdened with the task of recoding all the transactions.
and lastly, finding out errors in recording can be easily done when there are separate books and responsibility can be fixed on the particular person handling that book. so, for clarity and convenience sake, the journal is sub divided.

Answer 2

Sub-Divisions Of Journal :
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Sub-Division of a journal helps us to record the special types of journal , with the help of specialised people. It is because for an ordinary accountant to record all types of transactions in the journal is not always possible.

Since, there are numerous transactions in a Bussiness unit, it becomes necessary to use a number of subsidiary journals , instead of using a single journal, although one journal is used for maintaining one particular class of transaction. That's why , in all Bussiness houses , a number of original entries for recording the different types of transactions, are used.

Cash book is the most important book. It contains cash transactions. Therefore , the following subsidiary books are maintained for credit and other types of transactions :-

◆ Purchase Book :- For recording credit purchases of Goods.

◆ Sales Book :- For recording credit sales of Goods.

◆ Purchase Return Book or Return Outward Book :- For recording returned to suppliers.

◆ Sales Return Book or Return Inward Book :-
For recording Goods returned by the customers.

◆ Bills Receivable Book :- For recording all transactions relating to bills Receivable.

◆ Bills Payable Book :- For recording all transactions relating to bills Payable .

◆ Cash Book :- For recording all cash transactions.

If all cash transactions are recorded in Cash Book, It becomes very helpful for the part of the accountant to maintain records.

All transactions are recorded in the journal at first, it becomes very helpful to post the transactions in the ledger chronologically.

In a small Bussiness enterprise, where transactions are few in number , it is sufficient to maintain records with the help of journal & ledger. But, in case of large Bussiness firms , it is not enough to maintain records properly with the help of journal & ledger , because of the volume , it is impossible to handle them. That's why the journal is subdivided.