BOOKS FOR SUBSIDIARY USE

In small enterprises when a single accountant can keep accounts or the owner himself can conduct the accounts job, maintaining a single journal hook' in which journal entries are written for each transaction and posted to ledger is feasible. Transactions in larger businesses are so numerous and diversified that a single journal book is completely inadequate and inconvenient. Several accounts assistants may be required to work together on accounts and split the workload. To minimise and facilitate ledger work, it may be required to aggregate comparable transactions even at the journal stage in the form of 'special journals.' As a result, the Subsidiary Books system was created as an alternative to a single journal. The following are examples of subsidiary books:

(a) Purchases book to keep track of credit purchases; 

(b) Sales book to keep track of credit sales; 

(c) Purchase returns book to keep track of returns to suppliers.

(d) A sales returns book is used to track customer returns.

(e) A cash book is used to keep track of all cash receipts and payments.

(f) A bill receivable book is used to keep track of the bills that have been received.

(g) A bill payable book is used to keep track of the bills that have been accepted.

(h) General journal or suitable journal for recording any additional transactions not covered by the foregoing specialised subsidiary books.

The following are some of the advantages of subsidiary books:

(a) Work reduction: When compared to a single journal, this approach minimises overall work because only one posting is made on the transaction date. The second aspect is a consolidated monthly posting. (b) Allows for group work: A single journal can be written by a single person. Many accountants are capable of working on subsidiary books. (c) Accuracy: Because of specialised work and monthly summarised postings, accounts will be more accurate. (d) More accurate data: A lot of useful data is made available, such as total credit sales, credit purchases, returns, and so on, which is not possible in a journal system. (e) Cash book: The cash book serves as both a journal and a ledger account. As a result, there is no need for a separate cash account. 

Even bank A/e is not required in the ledger when using a three-column cash book. 

Basic Subsidiary Book Documents (a) Inward invoice: An inward invoice is a document sent by a supplier of goods that contains information about the goods sent, such as price, value, and discount. It serves as the foundation for entries in the purchase book. (b) Outward Invoice: This is a document sent by the company to its customers that contains information about the goods provided, their price and value, discounts, and so on. It serves as the foundation for writing a sales book. (c) Debit note: When suppliers' goods are returned, they receive a debit note detailing the items returned and their value. It serves as the foundation for purchasing Returm's book. (d) Credit Note: When consumers return items, the company prepares a credit note for them and sends it to them, detailing the amount credited to them based on the returned goods. This note serves as the foundation for the creation of a sales returns book. e) Cash Receipts and Vouchers: These are receipts and vouchers for money received and paid. The strength of the vouchers and receipts is used to make entries in the cash book. They're also beneficial for audits.