When a business becomes large and performs a large number of transactions daily, it finds the single journal book insufficient to keep a primary record of all the transaction. The task of journalizing all the transaction is troublesome and expensive. It does notprovide classified information immediately. It fails to report the total amount of credit purchases and credit sales. The practical system of primary record of the transaction is subsidiary books.
Instead of maintaining a single journal book, a large sized business maintains some journal books. The collective form of all these journal books is known as subsidiary books. They are a subdivision of Journal. They are the set of a primary book in which the transactions of the business are recorded at the first time in a classified way.
"Subsidiary books of accounts are also called books of original entry because all the transactions are recorded originally or in the first instance in this subsidiary book." - Dr. A. N. Agrawala
"Subsidiary records are also known as the book of original entry, as transactions are entered there in the first instance so that they may be subsequently transferred to their respective accounts in the ledger." - J.R. Batliboi
The important advantages of subsidiary books are as follows:
The following are the notable limitations of subsidiary books:
Why subsidiary book is impossible to record in journal or ledger directly?
It is impossible to record the subsidiary book in journal or legder account directly because this approach will not allow division and sub-division of work and speedy working.
Mention the advantages of subsidiary books?
The advantages of subsidiary books are:-
In what cases sold goods are returned?
Sold goods are returned due to defect in the goods, due to over-supply of goods and due to delay in the dispatch of goods.
Why purchase of goods on credit only is recorded in the purchase book?
The purchase of goods on credit only is recorded in the purchase book because the information can be made available, when purchases of goods on credit are separately recorded.
Under what basis the subsidiary books having non-cash transaction enumerated?
The subsidiary books having non-cash transaction are enumerated under:-
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