what is subsidiary books

Juliet D'cruz

What Is Subsidiary Books?

Are you curious to know what is subsidiary books? You have come to the right place as I am going to tell you everything about subsidiary books in a very simple explanation. Without further discussion let’s begin to know what is subsidiary books?

In accounting, subsidiary books are a set of books that are maintained in addition to the main books of accounts. Subsidiary books are used to record specific types of transactions that occur frequently, such as sales, purchases, and cash receipts. In this blog, we will discuss what subsidiary books are, why they are important, and the types of subsidiary books that are commonly used.

What Is Subsidiary Books?

Subsidiary books, also known as subsidiary ledgers, are a set of books that are used to record specific types of transactions. They are maintained in addition to the main books of accounts, such as the general ledger. Subsidiary books are used to record transactions that occur frequently, such as sales, purchases, and cash receipts. By maintaining subsidiary books, businesses can keep their main books of accounts organized and reduce the amount of time and effort required to maintain them.

Why Are Subsidiary Books Important?

Subsidiary books are important for several reasons. Firstly, they help businesses keep their main books of accounts organized by recording specific types of transactions in separate books. This makes it easier to maintain and reconcile the main books of accounts. Secondly, subsidiary books help businesses keep track of transactions that occur frequently and in large volumes. This can help businesses identify trends and make informed decisions about their operations. Lastly, subsidiary books provide a detailed record of transactions that can be used for internal audits, tax compliance, and financial reporting.

Types Of Subsidiary Books

There are several types of subsidiary books that are commonly used in accounting. The most common types of subsidiary books include:

  • Sales book: A sales book is used to record sales transactions.
  • Purchases book: A purchases book is used to record purchases transactions.
  • Cash book: A cash book is used to record cash receipts and payments.
  • Petty cash book: A petty cash book is used to record small cash transactions.
  • Journal proper: A journal proper is used to record transactions that cannot be recorded in other subsidiary books.

Conclusion

In conclusion, subsidiary books are a set of books that are maintained in addition to the main books of accounts. They are used to record specific types of transactions that occur frequently. Subsidiary books help businesses keep their main books of accounts organized, track transactions that occur frequently and in large volumes, and provide a detailed record of transactions for internal audits, tax compliance, and financial reporting. The most common types of subsidiary books include sales books, purchases books, cash books, petty cash books, and journal proper.

FAQ

What Is Meant By Subsidiary Books?

Subsidiary books record comparable transactions. These are original entry books that record similar or repeating transactions in chronological order. They are used instead of journals to record similar or repetitive transactions. There are different types of subsidiary books that are used on day to day accounting basis.

What Is Subsidiary Books Class 11?

Subsidiary Books are the sub divisions of a Journal. These books are meant for recording the transactions of a similar nature in a separate book. When there are many transactions, the Journal is sub-divided into subsidiary books to record such voluminous transactions and events in one single book.

Why Is A Subsidiary Book Important?

Subsidiary books are important because they provide a more efficient method of recording transactions. By recording transactions in subsidiary books, accountants also record financial transactions efficiently.

Who Introduced Subsidiary Books?

The subsidiary alliance in India was planned by Lord Wellesley, but this term was introduced by French Governor Dupleix.

 

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