Subsidiary Books : Accounting Basics Day 4

Businesses do not record a their transactions in one journal. The reason is that, journal can not give periodical data about some important business transactions viz. monthly sales, or purchases. Moreover having only one journal does not facilitate internal check system, since only one person handles journal.
Transactions can be classified and grouped according to their nature when they are repetitive in nature. Transactions are of two types: Cash and Credit. These can be grouped in two different categories viz. cash and credit. Thus journal is divided into separate sub-books for each category of transaction, which are repetitive and sufficiently large in number. Following are the subsidiary books which are special journals.

• Day Books- Purchase book, sales book, purchase return book, sales return book
• Bill books- Bills receivable and bills payable book
• Cash book
• Journal paper

Purpose

1. Purchases Book records only credit purchases of goods by the trader.
2. Sales Book is meant for entering only credit sales of goods by the trader.
3. Purchases Return Book records the goods returned by the trader to suppliers.
4. Sales Return Book deals with goods returned (out of previous sales) by the customers.
5. Bills Receivable Book records the receipts of bills (Bills Receivable).
6. Bills Payable Book records the issue of bills (Bills Payable).
7. Cash Book is used for recording only cash transactions i.e., receipts and payments of cash.
8. Journal Proper is the journal which records the entries which cannot be entered in any of the above listed subsidiary books.

Kinds of Subsidiary Books
The number of subsidiary books may vary according to the requirements of each business. The following are the special purpose subsidiary books.

• Purchases Book records only credit purchases of goods by the trader.
• Sales Book is meant for entering only credit sales of goods by the trader.
• Purchases Return Book records the goods returned by the trader to suppliers.
• Sales Return Book deals with goods returned (out of previous sales) by the Customers.
• Bills Receivable Book records the receipts of bills (Bills Receivable).
• Bills Payable Book records the issue of bills (Bills Payable).
• Cash Book is used for recording only cash transactions i.e., receipts and payments of cash.
• Journal Proper is the journal which records the entries which cannot be entered in any of the above listed subsidiary books

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