Accountancy · Ch 6 — Subsidiary Books – I
Need for Subsidiary Books
Need for Subsidiary Books
In a business that carries out only a handful of transactions in a period, every transaction can conveniently be recorded, one by one, in a single Journal. But once the volume of transactions grows — hundreds of credit purchases, credit sales, returns, and cash dealings every month — routing every single one of them through one common Journal becomes slow, error-prone, and makes it hard to locate any one class of transaction later. The practical solution accounting uses is to sub-divide the Journal into a number of special-purpose books, each meant to record only ONE class of recurring transaction. These special-purpose books are called Subsidiary Books (also called Books of Original Entry, or Special Journals), because a transaction of that class is entered there for the very first time, exactly as it would otherwise have been entered in the Journal.
Tamil Nadu's Samacheer Kalvi HSC Commerce Accountancy syllabus draws on the very same double-entry bookkeeping principles that CBSE/NCERT Class 11 Accountancy students study — subsidiary books, ledger posting and the trial balance are common vocabulary across every Indian board's commerce stream.
Using subsidiary books does not, in any way, disturb the double-entry principle — every transaction recorded in a subsidiary book still eventually results in one debit and one equal credit, exactly as a Journal entry would. What changes is only how the transaction reaches the ledger: instead of a full journal entry with a narration for every single transaction, a subsidiary book simply lists similar transactions one below the other, and the posting to the ledger is done either individually (for personal accounts) or periodically in one lump total (for the impersonal account concerned), saving a great deal of repetitive clerical work.
The commonly used Subsidiary Books are:
| Subsidiary Book | Records |
|---|---|
| Purchases Book | Credit purchases of goods only |
| Purchases Return Book (Returns Outward Book) | Goods returned to suppliers (out of credit purchases) |
| Sales Book | Credit sales of goods only |
| Sales Return Book (Returns Inward Book) | Goods returned by customers (out of credit sales) |
| Cash Book | All cash and bank transactions (covered in Subsidiary Books – II) |
| Bills Receivable Book / Bills Payable Book | Bills of exchange received / accepted |
| Journal Proper | Every transaction that does not fit any of the above |
This chapter covers the four goods-related subsidiary books — Purchases Book, Purchases Return Book, Sales Book, and Sales Return Book — and the Journal Proper, which mops up every transaction none of the special books is designed to hold.
Special-purpose books of original entry, each recording only one class of recurring transaction (e.g. credit purchases, credit sales), used instead of routing every transaction through a single Journal.
Books in which a transaction is recorded for the very first time from a source document — the Journal, and each of the subsidiary books, are all Books of Original Entry.