Business Accountant Tutorial | Subsidiary Books

Subsidiary Books topic details

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The books of original or prime entry are also called subsidiary books since ledger accounts are prepared on their basis and without this, further process of preparing Trial Balance cannot be taken out. We know that it is practically impossible to record numerous transactions in only one principal book of accounts. Therefore, the journal is divided into a number of subsidiary books.

Types of Subsidiary Books

  • -Cash Book: It records receipts and payments of cash, including receipts into and payments out of the bank.
  • -Purchase Book: It is a subsidiary book where all the credit purchases of revenue goods are recorded.
  • -Sales Book: It is a subsidiary book where all the credit sales of revenue goods are recorded.
  • -Purchase Returns Book : It is a subsidiary book where all the purchase returns of revenue goods are recorded. It is also known as Return Outwards book
  • -Sales Returns Book: It is a subsidiary book where all the sales returns of revenue goods are recorded. It is also known as Return Inwards book.
  • -Bills Receivable Book: It is a subsidiary book where all the Bills Receivables accepted by the debtors are recorded. It records the receipts of promissory notes or hundis from various parties.
  • -Bills Payable Book: It is a subsidiary book where all the Bills payables accepted are recorded. It records the issue of promissory notes or hundis to other parties.
  • -Journal Proper: All other transactions which do not find place in any of the above subsidiary books are recorded in this residuary journal. Example – Opening Entries, Closing entries, Transfer entries, Credit Purchase of Capital Goods etc.

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