OBJECTIVES OF PREPARING SUBSIDIARY BOOKS :
i)To make the recording work easy and quick
ii) To have the division of labor
iii) To provide information relating to a particular aspect of the business
iv) To reduce the clerical work.
TYPES OF SUBSIDIARY BOOKS :
• Purchase Book
• Sales Book
• Purchase Return Book
• Sales Return Book
• Cash Book
• Bills Receivable Book
• Bills Payable Book
• Journal proper
I) purchase Book -- To record all credit purchases of goods only.
II) Sales Book -- To record all credit sales of goods only.
III) Purchase Return Book -- To return all the goods returned by the concern.
IV) Sales Return Book -- To record all the goods returned by the customer.
V) Cash Book -- To record all the incoming and outgoings of cash.
VI) Bills Receivable Book -- To record Bills of exchange accepted by the concern, promissory notes, or hundreds received from various parties.
VII) Bills Payable Book --To record the bills of exchange accepted by the concerned promissory notes or hundies payable to various parties.
VIII) Journal proper -- To record any transaction which could not be recorded in any of the above seven subsidiary books.
ADVANTAGES OF SUBSIDIARY BOOKS :
I) Division of work: Instead of one Journal, there are now eight books. It would be possible to allocate the work to difficult clerks who can simultaneously record the transaction.
II) Efficiency: Due to such allocation, each clerk will specialize in the work allotted to him, and naturally, he will become efficient in that part of the accounting work.
III) Time saving: Transaction of brutal nature will be recorded simultaneously. Therefore recording work can be done quickly.
IV) Readymade Information: When we want to get information on any aspect of the business, we can get it quickly as the transaction relating to different elements are recorded in the appropriate books.
V) Easy checking: Checking of the transaction for mistakes and errors can be quickly done.
VI) Work of posting is halved: When we use subsidiary books, instead of journals, the posting work is reduced more or less to half. Because only the total amount of the sales book, purchase Book, etc, are posted in the ledger. Similarly, when we write up the cash book, cash a/c and bank a/c are prepared. Besides, the narration to be given in the Journal is also avoided.
Purchase Book :
The purchase Book is meant for recording credit purchases of goods only. It is also known as purchase Day Book or Bought Day Book. This book records only purchases of goods that are meant for resale. Purchase of items other than goods on credit will be entered in the Journal proper only. Similarly, cash purchases of goods will be entered in the cash book only.
Sales book :
sales book is also known as a sales day book. This book is meant for recording credit sales of goods only. The sale of articles other than goods on credit is recorded in the Journal proper.
Purchase return Books :
It is also known as the outward return book. In this book, goods returned to suppliers are recorded. The recording in this book is made based on debit notes issued.
Sales return Book :
It is also known as the inward return book. In this book, goods returned by customers for various reasons are entered. On receipt of the goods from the customer, the seller issues a credit note to the customer.
You must be logged in to post a comment.