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Long Answer Questions · Q1

Q.Explain the need for drawing up the special purpose books.

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When transactions are numerous, recording all of them in one journal is impractical. Special purpose books are drawn up to record each class of transaction separately, giving division of work, specialisation, speed, easy reference and better control.

Need for special purpose books.

  1. Large volume of transactions. In a big business thousands of transactions occur; a single journal cannot handle them conveniently, so the journal is sub-divided.
  2. Division of work. Each subsidiary book can be maintained by a different clerk, so several people can record simultaneously and the accounting work is completed faster.
  3. Specialisation and efficiency. A clerk who handles only one book (say the sales book) becomes expert and accurate at it.
  4. Saving of time. Similar transactions are recorded together without writing a fresh narration each time; the accountant is freed for more important work.
  5. Easy reference and checking. All transactions of one kind are found in one place, so information is located quickly and errors are easier to detect.
  6. Better internal check and control. As the work is divided, one person's work is automatically checked by another, reducing the chance of fraud and error.
Purpose servedBenefit
Handle large volumeSub-divides an unwieldy journal
Division of labourMany clerks record at once
SpecialisationSpeed and accuracy
Time-savingRepetitive entries recorded together
Easy referenceQuick location and checking
Internal checkReduced fraud and error

Working Notes

  1. No computation is required; this is a theory question on the need for special purpose books.
✓Final answer

Special purpose books are needed to cope with a large number of transactions by sub-dividing the journal into class-wise books, thereby enabling division of work, specialisation, speed, saving of time, easy reference and checking, and stronger internal control.

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