CONCEPT OF SUBSIDIARY BOOKS


A big business needs to perform a large volume of financial transactions As a result, the title of a single journal book may be inadequate as well as inconvenient to systematically record all such financial transactions. Thus, the journal is subdivided into a number of specialized journals known as the subdivision of journals facilitates systematic recordings of a growing number of financial transactions in a specialized manner. Thus, the subdivision of a single journal into a number of journals is known as the subdivision of the journal, and each sub-journal subsidiary book.

Subsidiary Books


MEANING AND DEFINITIONS OF A SUBSIDIARY BOOK


A subsidiary book is a book al original entry in which financial transactions are first recorded in a systematic and chronological order as and when they arise. A subsidiary book is also called a special journal. Each subsidiary book is a specialized book that records a special class of financial transactions. For example, credit purchases are recorded in a subsidiary book, credit sales are recorded in another subsidiary book, and so on. The subdivision of journals subsidiary books is a set of bonks of original entries in which different classes of financial transactions are recorded systematically in chronological orders and when they arise.

IMPORTANCE AND ADVANTAGES OF SUBSIDIARY BOOKS


The important advantages of subsidiary books are as follows

Smooth recording: Subsidiary books facilitate the smooth recording of a growing number of financial transactions of a business by employing a number of people for the purpose. 

Saving of time: Recording of financial transactions at a time in a number of books will become possible. Posting only the periodical totals of these books in real and nominal accounts minimize recording work thus saves time.

Division of work: A number of book-keepers can be assigned for separate books. Therefore, the division of work can be introduced.

Increase in efficiency: The division of work among book-keepers results in their increasing efficiency as they have to write only a special class of financial transactions in a special journal

Internal check: Subsidiary books also facilitate internal check, as the work of a bookkeeper may automatically be checked by another book-keeper.

Classified information: The use of subsidiary books makes it easy to obtain classified information about the different classes of financial transactions.

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