Write 10 lines about subsidiary books
Answers
Subsidiary Books are those books of original entry in which transactions of similar nature are recorded at one place and in chronological order. In a big concern, recording of all transactions in one Journal and posting them into various ledger accounts will be very difficult and involve a lot of clerical work.
This is avoided by sub-dividing the journal into various subsidiary journals or books. The subdivisions of journal into various subsidiary journals for recording transactions of similar nature are called as ‘Subsidiary Books.’
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The different subsidiary books and their purpose are shown below:
1. Purchases Day Book – for recording credit purchase of goods only. Cash purchase or assets purchased on credit are not entered in this book.
2. Sales Day Book – for recording credit sales of goods only. Assets sold or cash sales are not recorded in this book.
3. Purchases Returns Book – for recording the goods returned to the suppliers when purchased on credit.
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4. Sales Returns Books – for recording goods returned by the customers when sold on credit.
5. Bills Receivable Book – for recording the bills received [Bills Receivables] from customers for credit sales.
6. Bills Payables Book – for recording the acceptances [Bills Payables] given to the suppliers for credit purchases.
7. Cash Book – for all receipts and payments of cash.
8. Journal Proper – for recording any transaction which could not be recorded in the above-mentioned subsidiary books. For example, assets purchased or sold on credit and opening entry etc., are entered in this book.