Subsidiary Books of Account
Also known as special purpose books, special purpose subsidiary books, and subsidiary books of accounts are various books recording financial transactions of a similar nature. They are sub-division of the journal.
During the lifecycle of a business, the volume of transactions in a business may rise to an extent that a single journal may no longer be adequate to keep the books. This is when special purpose books or subsidiary books may be required for more efficient bookkeeping.
|CASH BOOKS||PURCHASE BOOK||SALES BOOK||PURCHASE RETURNS BOOK|
|SALES RETURN BOOK||JOURNAL PROPER||BILLS RECEIVABLE BOOK||BILLS PAYABLE BOOK|
Types of Subsidiary Books
Cash Book– A cash book is a book of prime entry which records all transactions made by a business in both cash and a bank instrument.
Purchase Book– A purchase book is one of the special purpose books where all the credit purchases are recorded by a business.
Sales Book– A sales book is one of the subsidiary books where all the credit sales are recorded by a business.
Purchase Returns Book– Also known as returns outward book, a purchase returns book is prepared to record goods returned by a business to its suppliers.
Sales Return Book– Also known as returns inward book, a sales return book is prepared to record goods returned to a business by the customers.
Journal Proper– It is a book in which all miscellaneous transactions which are not recorded in any other subsidiary book is called a journal proper.
Bills Receivable Book– is a book that records all bills receivable to a business, the total of bills receivable book is posted on the debit side of the B/R account.
Bills Payable Book– is one of the subsidiary books that records all bills payable by a business, the total of bills payable book is posted on the credit side of the B/P account.