A lot of transactions take place every day in business and many of these transactions are of the same type such as sale, purchase, return, cash and bank, etc. Businesses that have fewer transactions can record all the transactions in one book, but businesses that have more transactions cannot record all the transactions in one book because doing so makes it difficult to manage the transactions.
To ease the management of transactions, separate books are used for different types of transactions, like all purchase transactions are recorded in the purchase book, and all sale transactions are recorded in the sales book. By doing this, one type of transaction is recorded in one place, making it easier to manage and analyze transactions.
Note: Due to increasing technology, manual work is decreasing.
Table of Contents
What are Subsidiary Books?
Subsidiary books are a group of books used to reduce the workload of the journal and make the management of transactions easier by recording one type of transaction in one book. Subsidiary books are a part of the journal and are also known as sub-journal book, sub-divided book, etc. In this system, separate books are used for frequently occurring transactions like sales, purchases, sales returns, purchase returns, cash and bank, etc.
In simple language, when we use different books to record specific types of transactions separately in the initial stage of accounting then they are called subsidiary books. There is no restriction on the use of subsidiary books that it can be used only for a particular transaction. Any business can use subsidiary books for any type of transaction as all businesses have different transactions according to their nature.
Features of Subsidiary Books
Following are the features of subsidiary books:
1. Original Entry:
All the transactions recorded in the subsidiary books are called original entries because all the transactions in the subsidiary books are recorded directly from the source documents. For example, when sale transaction is made it is recorded in the sales book, similarly when purchase transaction is made it is recorded in the purchase book.
2. Group of Books:
Subsidiary books are a group of books as it includes various books which are used to record different types of transactions. Subsidiary books mainly include Cash Book, Sale Book, Purchase Book, Sale Return Book, Purchase Return Book, etc.
3. Easy:
Subsidiary books are easy to use and manage as only basic knowledge is required for its use and management. All basic formats are already available in the books making it easy to record transactions.
4. Division of Work:
With the use of subsidiary books, the work is divided so that the work can be done in a better way. For example, all transactions related to sales are recorded and managed by the concerned person, similarly, all transactions related to purchases are recorded and managed by the concerned person.
5. Efficiency Increase:
The use of subsidiary books helps in the division of work so that the right person gets the right work, resulting in increased work efficiency. When a person does the same work repeatedly, his efficiency increases.
6. Error Reduction:
When a person does the same work repeatedly, his efficiency increases, as a result of which the possibility of errors in the work is reduced. Big businesses always divide work to bring efficiency and reduce errors in work.
Read Also:
QNA/FAQ
Q1. What are Subsidiary Books?
Ans: Subsidiary books are a group of books used to reduce the workload of the journal and make the management of transactions easier by recording one type of transaction in one book.
Q2. Is the entry recorded in the subsidiary books the original entry?
Ans: Yes, all the entries recorded in the subsidiary books are original entries because in it all the entries are recorded directly from source documents.
Q3. Do subsidiary books helps reduce errors?
Ans: Yes, subsidiary books help in reducing the errors because each subsidiary book is maintained by the concerned person due to which a person does the same work again and again which results in reducing the possibility of errors in the work.
Q4. Do subsidiary books divide the work?
Ans: Yes, subsidiary books divide the work as each book is maintained by the concerned person.
Q5. Write the features of subsidiary books.
Ans: Following are the features of subsidiary books:
1. All entries recorded in subsidiary books are original entries.
2. Subsidiary books are a group of books.
3. Subsidiary books are easy to use and manage.
4. Division of work is done with the help of supporting books.
5. Efficiency increases with the help of supporting books.
6. Subsidiary books help to reduce errors in work.
