1. Subsidiary Books
Subsidiary books are books of original or prime entry.
Ledger accounts are prepared on the basis of Subsidiary
books.
Trial balance is prepared on the basis of Ledger.
Financial Statements are prepared on the Basis of Trial
balance.
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2. Advantages of Subsidiary Books :
Division of work
Specialisation and efficiency
Saving of the time
Availability of informations
Facility in checking:
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3. DISTINCTION BETWEEN SUBSIDIARY
BOOKS AND PRIMARY BOOKS :
The books in which transactions are first recorded to enable
processing are called subsidiary books.
The ledger and the cash book are the principle books since
they furnish information for preparation of the trial balance
and financial statements.
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4. ►Subsidiary Books Are :
• Purchase Book : Record All Credit Purchases of goods(not cash).
• Sales Book : Record All Credit Sale of goods(not cash).
• Purchase Return Book or Return Outward
• Sales Return Book or Return Inward Book
• Bills Receivable Book
• Bills Payable Book
• Journal Proper transactions 4
5. ►SALES BOOK WITH SALES TAX COLUMN :
Sales Tax is levied at the point of sales.
Sales tax is collected by the seller from the customers and
deposited the same with the state government.
Sales tax is charged at a fixed percentage on the net price of the
goods.
It is calculated after giving trade discount, if any.
It is better to open a separate column in the Sales Book for
sales tax.
At the end of a certain period, generally quarterly or monthly,
the total of sales tax column is credited to the Sales Tax
Account.
When sales tax is deposited the Sales Tax Account is debited
and Cash/Bank Account is credited.
If there is any credit balance in Sales Tax Account be shown in
the Balance Sheet as a liability.
6. ►IMPORTANT POINTS:
Goods being received and accepted back (Sales Return) from the
customers, a credit note is issued to the customers concerned.
(Credit The Customer A/c).
When goods are returned to suppliers (Purchase Return) we will
issue the necessary Debit Note to supplier.
If someone who accepted a promissory note (or bill) and is not
able to pay in on the due date,a journal entry will be necessary to
record the non-payment or dishonour.
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7. ►IMPORTANT POINTS:
Goods being received and accepted back (Sales Return) from the
customers, a credit note is issued to the customers concerned.
(Credit The Customer A/c).
When goods are returned to suppliers (Purchase Return) we will
issue the necessary Debit Note to supplier.
If someone who accepted a promissory note (or bill) and is not
able to pay in on the due date,a journal entry will be necessary to
record the non-payment or dishonour.
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