Subsidiary Books

Though the principle of journalising all transactions, known as continental system of bookkeeping is quite perfect in actual business but in a large business it is found inconvenient to Journalise every transaction and sometime it becomes rather impossible for one man to Journalise numerous transactions on a business in one journal. Therefore, the journal is sub-divided into different journals knownas the subsidiary books or books of prime entry or books of original entry . These are the books in which are recorded the details of transactions as they take place from day to day, in a classified manner.
In every trading concern, the transactions, however numerous they may be, can be grouped into small number of classes. They consist chiefly of receipts and payments of cash, purchases and sales of goods, returns of goods purchased and sold, bills receivable and bills payable. The journal is divided in such a way that a separate book is used for each class of transactions.
The important subsidiary books used in modern business world are the following:-
1.
Cash Book:
It is used to record all cash receipts and payments.
2.
Purchases Book:
It is used to record all credit purchases.
3.
Sales Book:
It is used to record all credit sales
4.
Purchases returns book:
It is used to record all goods returned by business to its suppliers.
5.
Sales Returns Book:
It is used to record all goods returned to business by its customers.
6.
Bills Receivable Book:
It is used to record all accepted bills received by business.
7.
Bills payable Book: It is used to record all bill accepted by business to its creditors.
8.
Journal Proper:
It is used for recording those transactions for which there is no separate book.
All these subsidiary books are called books of original entry , as transactions in their original form are entered therein.

Advantages of Different Journals:
The advantages of having several books of original entry in place of one journal may be stated to as follows:
1.
It may be impossible to record each transaction into the ledger as it occurs. Subsidiary books record the details of the transactions and therefore, helps the ledger to become brief.
2.
As similar transactions are recorded together in the same book, future reference to any of them becomes easy.
3.
The chance of fraudulent alteration in an account is reduced as the book of original entry keeps records of the transactions in a chronological order.
4.
The work of posting can been trusted to several clerks at the same time and thus the ledger of a large business can be written up much more quickly.
5.
As each journal contains separately transactions of similar nature any desired analysis can be made conveniently.