Subsidiary Books

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.

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.