Subsidiary Books: Introduction, Advantages of Subsidiary Books

Subsidiary Books: Intro and Benefits of Subsidiary Books In an Organization, the majority of the deals normally associate with receipts and payments of money, sale of goods and their purchase. It is practical to keep a different register for each such class of deals one for invoices and payments of money, one for purchase of products and one for sale of items. A register of this type is called a book of initial entry or of prime entry. For transactions taped in such books there will be no journal entry.

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The system by which transactions of a class are very first recorded in the book, specifically implied 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 must be kept in mind that in this system, there is no departure from the rules of the double entry system

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Subsidiary Books — Introduction

These books of original or prime entry are likewise called subsidiary books because ledger accounts are prepared on their basis and, without the further procedure of journal publishing, a trial balance can not be gotten. Usually, the following subsidiary books are used in a business:

( i) Money book to record receipts and payments of money, including invoices into and payments out of the bank.

( ii) Purchases book to record credit purchases of items handled or of the products and shops required in the factory.

( iii) Purchase Returns Books to tape the returns of products and products formerly acquired.

( iv) Sales Schedule to tape the sales of the items handled by the company.

( v) Sale Returns Reserve to record the returns made by the clients.

( vi) Bills receivable books to record the receipts of promissory notes or hundies from numerous celebrations.

( vii) Bills Payable Book to tape the issue of the promissory notes or hundies to other celebrations.

( viii) Journal (appropriate) to tape the transactions which can not be recorded in any of the seven books mentioned above

It might be kept in mind that in all the above cases the word “Journal” may be utilized for the word “book”

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Benefits of Subsidiary Books

The use of subsidiary books pays for the undermentioned benefits:

( i) Department of work: Since in the location of one journal there will be a lot of subsidiary books, the accounting work may be divided among a variety of clerks.

( ii) Expertise and effectiveness: When the exact same work is allocated to a specific individual over an amount of time, he gets complete understanding of it and ends up being effective in managing it. Thus the accounting work will be done effectively.

( iii) Conserving of the time: Various accounting procedures can be undertaken at the same time because of using a number of books. This will lead to the work being completed rapidly.

( iv) Accessibility of details: Because a different register or book is kept for each class of transactions, the info connecting to each deals will be offered at one place.

( v) Facility in monitoring: When the trial balance does not agree, the area of the mistake or mistakes is assisted in by the existence of separate books. Even the commission of errors and scams will be inspected by the use of numerous subsidiary books.

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