Explanation

The ledger containing accounts of debtors and creditors is called the personal ledger. Personal accounts are named after specific persons, businesses, or organizations that the business deals with.

Debtors (trade receivables) are customers who owe money to the business for goods sold on credit. Creditors (trade payables) are suppliers to whom the business owes money for goods bought on credit. Both are personal accounts.

The personal ledger is often split into two subsidiary ledgers: the Sales Ledger (containing debtor accounts) and the Purchase Ledger (containing creditor accounts).

The nominal ledger contains income and expense accounts. The real ledger contains asset accounts like machinery and buildings. Impersonal ledger is a general term for ledgers that do not contain personal accounts. Debtors and creditors, being specific individuals or companies, belong in the personal ledger.