Subsidiary Books: Introduction and Advantages of Subsidiary Books. In a Business, most of the transactions generally relate to receipts and payments of cash, sale of goods and their purchase. It is convenient to keep a separate register for each such class of transactions one for receipts and payments of cash, one for purchase of goods and one for sale of goods. A register of this type is called a book of original entry or of prime entry. For transactions recorded in such books there will be no journal entry.The system by which transactions of a class are first recorded in the book, specially meant for it and on the basis of which ledger accounts are then prepared is known as the Practical System of Book keeping or even the English System. It should be noted that in this system, there is no departure from the rules of the double entry system
Subsidiary Books - Introduction
(vi) Bills receivable books to record the receipts of promissory notes or hundies from various parties.(vii) Bills Payable Book to record the issue of the promissory notes or hundies to other parties.
Advantages of Subsidiary Books
The use of subsidiary books affords the undermentioned advantages :(i) Division of work : Since in the place of one journal there will be so many subsidiary books, the accounting work may be divided amongst a number of clerks.
(iv) Availability of informations : Since a separate register or book is kept for each class of transactions, the information relating to each transactions will be available at one place.(v) Facility in checking: When the trial balance does not agree, the location of the error or errors is facilitated by the existence of separate books. Even the commission of errors and frauds will be checked by the use of various subsidiary books.
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