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:-
1)Division
of work.
2)Specialization
and efficiency.
3)Saving
the time.
iv. Availability of information's.
4)Facility
in checking.
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