Subsidiary books-types, table representation, quiz

2. Subsidiary book is the sub division of Journal.
These are known as books of prime entry or
books of original entry as all the transactions
are recorded in their original form. In these
books the details of the transactions are
recorded as the take place from day to day in a
classified manner.

3. Subsidiary books are maintained because it be
impossible to record each transaction into
ledger as it occurs. And these books record the
details of the transactions and therefore help
the ledger to become brief. Future references
and any desired analysis becomes easy as
transactions of similar nature are recorded
together.

4. -Considerable tax advantages and legal protections
-Ability to offset profits and losses of one part of a
business with another
-Some countries allow subsidiaries to file tax returns
on the profits obtained in that country
-Liabilities and credit claims are locked in that
subsidiary and cannot be passed on to the parent
company
-Allows for joint ventures with other companies with
each owning a portion of the new business operation

5. -Legal paperwork involved with creating a
subsidiary can be lengthy and expensive
-Control also becomes an issue when a
subsidiary is partially owned by another outside
organization

6. Cash Book
Sales Book
Purchase Book
Sales Return Book
Purchase Return Book
Bills Receivable Book
Bills Payable Book
Journal Proper

7. Cash book is a record of all the transactions
related to cash. Examples include: expenses
paid in cash, revenue collected in cash,
payments made to creditors, payments received
from debtors, cash deposited in bank,
withdrawn of cash for office use, etc.
Note: Cash book always shows debit balance,
cash in hand, and a part of current assets.

8. Single Column Cash Book
Double Column Cash Book
Triple Column Cash Book
Petty Cash Book

9. Cash book is just like a ledger account. There is no need to open a
separate cash account in the ledger. The balance of cash book is directly
posted to the trial balance. Since cash account is a real account, ruling is
followed, i.e. what comes in – debit, and what goes out – credit. All the
received cash is posted in the debit side and all payments and expenses
are posted in the credit side of the cash book.
FORMAT

10. Here, we have an additional Discount column on each side of the cash book. The debit
side column of discount represents the discount to debtors of the company and the
credit side of discount column means the discount received from our suppliers or
creditors while making payments.
The total of discount column of debit side of cash book is posted in the ledger account
of ‘Discount Allowed to Customers’ account as ‘To Total As Per Cash Book’. Similarly,
credit column of cash book is posted in ledger account of ‘Discount Received’ as ‘By
total of cash book’.
It may have the following columns;
•Cash and Discount column
•Cash and Bank column
•Bank and Discount column

11. When one more column of Bank is added in both sides of the
double column cash book to post all banking transactions, it is
called triple column cash book. All banking transactions are
routed through this cash book and there is no need to open a
separate bank account in ledger.
FORMAT

12. In any organization, there may be many petty transactions incurring for which
payments have to be done. Therefore, cash is kept with an employee, who deals with
it and makes regular payments out of it. To make it simple and secure, mostly a
constant balance is kept with that employee.
Suppose cashier pays Rs 5,000 to Mr A, who will pay day-to-day organization expenses
out of it. Suppose Mr A spend Rs 4,200 out of it in a day, the main cashier pays Rs
4,200, so his balance of petty cash book will be again Rs 5,000. It is very useful system
of accounting, as it saves the time of the main cashier and provides better control.
FORMAT

13. Sales book records all credit sales made by a business. It is one of the
secondary book of accounts and unlike cash sales which are recorded
in cash book, sales book is only to record credit sales. The amount
entered in the sales book is on behalf of invoices supplied to
purchasers, however a copy remains with the firm.
Sales book is also called Sales Journal or Sales Day Book.
FORMAT

14. Purchases book or purchases day book is a book of original
entry maintained to record credit purchases. You must note that cash
purchases will not be entered in purchases day book because entries in
respect of cash purchases must have been entered in the cash book.
Purchases book is written up daily from the invoices received. The
invoices are consecutively numbered. The invoice of each number is
noted in the purchases book.
FORMAT

15. When a business sends the ordered goods back to a vendor it is
recorded in sales return book. At times the buyer may return goods due
to poor quality, inaccurate quantity, untimely delivery or other reasons.
It is also called returns inwards and an appropriate sales return or a
returns inward book is maintained. All returns are primarily recorded in
the sales return book unless the returns are not that frequent, in which
case they are recorded in the journal.
FORMAT

16. Purchases returns journal is a book in which goods returned to the
supplier are recorded. This book is also known as returns outwards and
purchases returns day book.
Goods once purchased on credit may subsequently be returned to the
seller for certain reasons. For the buyer such return of goods to the
supplier (seller) is know as purchases returns.
FORMAT

17. Also known as a B/R book, a Bills Receivable Book is a subsidiary or a secondary book
of accounting, where all bills of exchange, which are receivable for the business, are
recorded. The total value of all the bills receivable for an accounting period is
transferred to the ledger.
A person who draws the bill of exchange is called a “drawer” and a customer on whom
it is drawn is called a “drawee” or an “acceptor”. A bill receivable for a “drawer” is a
bill payable for a “drawee”. A bills receivable account will usually have a debit balance.
Because a bill receivable is supposed to be received at maturity, it acts as an asset for
the business. Generally, every bill has a 3 day grace period.
FORMAT

18. Bill payable book is made for giving the acceptance to
creditors that we will pay the amount of bill at the
time of its maturity. In this book, we write date when
bill is given, to whom is given, where is it payable, due
date, amount and remarks.
FORMAT

19. Journal Proper is mainly used for original records of a
transaction which due to their importance or rareness of
occurrence do not find a place in any of the subsidiary books
of accounting. It is also known as a Miscellaneous Journal and
it looks much like any other journal.
FORMAT