Merits and demerits of subsidiary book points
Answers
The following are the merits of subsidiary book :-
1) It enables the division of work among accounting personnel by assigning with separate books and it increases efficiency of personnel as they perform same activities daily.
2)It helps to save time and labor by recording similar type of transactions in a separate book.
3)It becomes easy to access the detailed information relating to a particular transaction as the transactions relating to one head are recorded in a separate book.
4) It helps to install internal check system as the subsidiary book maintained by a clerk is automatically checked by another clerk.
5) It helps to maintain accounts and thus avoids the necessity of journal entries.
6) The existence of separate books help in the detection of errors quickly in case of disagreement of trial balance..
Demerits :
1. Not Suitable For All Types Of Business
Subsidiary books system is suitable for large business organizations with large number of transaction only. It is not applicable for medium and scale business firms with small volume of transactions.
2. Expensive
This system of accounting is very costly because of different journal books and large number of employees. So, subsidiary books system is not preferred by small business houses.
3. Complex
Due to large number of accounting personnel and different number of books, it is complex for the management to maintain coordination between different tasks and personnel. So, it is complicated method of accounting.