Subsidiary Book

Subsidiary Book

• 1.
  Accounting Unit – II SUBSIDIARYBOOK
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  Subsidiary Book Subsidiary Booksare books of Original Entry. They are also known as Day Book or special journals. We record transactions of similar nature are in Subsidiary Books. They are helpful in overcoming the limitations of journal book or journal entries Subsidiary book is the sub division of Journal.
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  Division of work Quicklydetection of errors Easy to access the detailed information relating to a particular transaction Helps to save time and labor by recording similar type of transactions in a separate book Possibility of Internal Check Why Subsidiary Books Are Important
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  Cash Book • SingleColumn • Double Column • Triple Column • Petty Cash Book Other Subsidiaries Book • Purchase Book • Sales Book • Purchase Returns Book/ Return Outward Book • Sales return Book/ Return Inwards Book • Bill Receivable Book
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  All credit purchasesof goods are recorded in the purchases journal whereas cash purchases are recorded in the cash book. Other purchases such as purchases of office equipment, furniture, building, are recoded in the journal proper It is also known as Purchase journal 1. Purchase Book Format
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  All credit salesof merchandise are recorded in the sales journal. Cash sales are recorded in the cash book. Sales book is also called a Sales Journal or Sales Day Book. 2. Sales Book Format
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  In this book,purchases return of goods are recorded. Sometimes goods purchased are returned to the supplier for various reasons such as the goods are not of the required quality, or are defective, etc. Purchase returns are also called Returns Outward Book 3. Purchase Returns Book Date Particulars Debit Note No L.F Details Amount Note: A column for “Remarks” can also be added to the purchase book which would include a brief description of the reason for why the goods were returned. Format
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  This journal isused to record return of goods by customers to them on credit. buyer may return goods due to poor quality, inaccurate quantity, untimely delivery or other reasons. It is also called Returns Inwards Book 4. Sale Returns Book Note: A column for “Remarks” can also be added to the Sales return book which would include a brief description of the reason why the goods were returned. Date Particulars Credit Note No L.F Details Amount Format
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  Bills receivable bookis used to record the bills received from debtors. When a bill is received, details of it are recorded in the bills receivable book. If the bills are received against credit sales, the seller may record the same in Bill receivable book The total value of all the bills receivable for an accounting period is transferred to the books of accounts. 5. Bill Receivable Book
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  Bills payable bookis used to record bill accepted by us. When a bill drawn by our creditor is accepted particulars of the same are recorded in this book. The total value of all the bills payable for an accounting period is transferred to the books of accounts. 6. Bill Payable Book
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  Cash Book Cash bookis a book in which all transactions relating to cash receipts and cash payments are recorded It works as a book of original entry as well as a ledger account
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  Parameter of Comparison Cash BookCash Account Purpose It serves dual purpose of journal and ledger. No need for cash transactions to be recorded in journal. It only serves the single purpose of a ledger. Types There are three types of cash books: single, double and triple column cash books. There is only one type of cash account Narration Cash books have narration which come after the entries Cash accounts are not followed by narration Dependency Cash books are not dependent on any other book because it is the book of original entry Cash accounts are dependent on journal day Order of recording The recording of transactions is done directly in a cash book The cash transactions are first recorded in a journal book and later recorded in the cash account Difference B/W Cash Book & Cash Account
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  Kinds of CashBook
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  This cash bookwill only record cash transactions. The cash coming in (receipts) will be on the left and the cash payments will be on the right. Do not record bank transactions in this cash book. Any discounts given will also not feature here. 1. Single Column Cash Book Date Particulars LF. Cash Date Particulars LF. Cash Format
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  Here instead ofone column, we have an additional column for discounts. So along with the cash transactions, we will also record the discounts in the same cash book. So both discounts received and the discount allowed is recorded here. 2. Double Column Cash Book Date Particulars LF. Discount Cash Date Particulars LF. Discount Cash Format
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  a triple columncash book has “Cash”, “Bank” and “Discount Allowed” on the receipt on the left side and “Cash”, “Bank” and “Discount Received” on the payments are on the right side of the cash book. Cash discount is recorded, when payments are made in cash or by check. 3. Three Column Cash Books Format Date Particulars LF. Discount Cash Bank Date Particulars LF. Discount Cash Bank
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  Contra Entry Contra entryrefers to transactions involving cash and bank account. In other words, any entry which affects both cash and bank accounts is called a contra entry. Contra in Latin means the opposite. It is more popularly known as contra voucher. 1. Cash 50,000 withdrawn for an official purpose from the bank. Journal entry for this transaction will be Cash A/C 50,000 To Bank A/C 50,000 Example
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  The book inwhich those small payments are recorded, which are not convenient to record in main Cash Book, is called petty cash book. Petty Cash Book is maintained to record small expenses such as postage, stationery, telegram. A separate column is allotted for each type of expenditure. The difference between the total of the debit items and that of the ‘total column’ on the credit represents the balance of the petty cash in hand. Petty Cash Book
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  Format – PettyCash Book