SUBSIDIARY BOOKS

SUBSIDIARY BOOKS

When number of transactions is numerous, it is practically impossible to record all the transactions through one journal because of its limitations. To overcome the shortcomings of the use of the journal entry, the journal is sub divided into special journals.

         The journal is subdivided in such a way, that a separate book is used for each category of transactions, which are repetitive in nature and are sufficiently large in number.

      Special journal, refer to the journals meant for specific transactions of similar nature. Special  journals are also known as subsidiary books or day-book.

In any large business organization, the following special journal (or subsidiary books) are generally used:

Name of Books

Transactions to be recorded

Cash Journals:

a)                   Cash book (simple)

b)                  Cash book with discount column

c)                   Cash book with bank and discount column.

d)                  Petty cash book.

Goods Journals:

a)                   Purchase book

b)                  Sales book

c)                   Sales returns book

 

d)                  Purchase returns book

 

Bills journals:

a)                   Bills receivable book

b)                  Bills payable book

 

Þ             Cash transactions

Þ             Cash and discount transactions

Þ             Cash, Bank and discount transactions

Þ             Petty cash transactions.

 

Þ             Credit purchase of goods

Þ             Credit sales of goods

Þ             Goods returned by those customers to whom    goods were sold on credit.

Þ             Goods returned to those suppliers from goods were purchased on credit

 

Þ             Bills receivable Drawn

Þ             Bills

 

Advantages of subsidiary Books:-

               i.            Division of work.

             ii.            Specialization and efficiency.

           iii.            Saving the time.

            iv.            Availability of information's.

              v.            Facility in checking.


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