What are the 8 different types of Subsidiary Books?

Let us know, as to, What are Subsidiary Books? Accordingly, let us see its types which helps us to know the scope and nature of these books as well.

What are Subsidiary Books? Meaning, definition, Scope of Subsidiary Books

Subsidiary books are those books that record transactions of similar nature. These are the books of original entry which record the transactions of similar nature or repetitive transactions at one place in chronological order. They are used in place of Journal to record transactions of similar nature or repeated transactions.

In big organisations, recording all the transactions of similar nature in a journal and posting such transactions to ledger accounts involve a lot of clerical work. It would be bulky and voluminous to maintain journal and ledger accounts for such a large variety of transactions of similar nature. To overcome these problems, big organisations will divide the journal into eight different books called Subsidiary books. Each subsidiary book will record transactions of similar nature and repetitive nature. For example, a purchase book will record the transactions relating to purchase of goods on credit from suppliers. The sales book will record the transactions relating to sale of goods on credit to customers. The cash book will record only cash related items such as cash receipts and cash payments.

What are the 8 different types of Subsidiary Books?

There are generally 8 different types of subsidiary books. They are classified as follows:

1. Purchase Book: Purchase book is to record the transactions relating to the purchase of goods on credit from suppliers. Cash purchase of goods is recorded in the cash book.

2. Sales Book: Sales Book is to record the transactions relating to the sale of goods to customers on credit. The cash sales are recorded in the cash book.

3. Cash Book: This book records only cash related items and transactions such as cash sales, cash purchases, purchase fixed assets for cash.

4. Purchase Return Book: This book record the purchase return of goods that are originally purchased on credit from suppliers.

5. Sales Return Book: This book record the sales return of goods that are originally sold to customers on credit.

6. Bills receivable Book: This book records transactions relating to the bills receivable that are drawn in favour of the business firms.

7. Bills payable Book: This book records transactions relating to the bills that are payable by the business firm.

8. Journal Proper: This book records the transactions that are not recorded in any of the above transactions. For example, transactions relating to credit purchase of fixed assets and sale of assets on credit, will be recorded in journal proper.

Conclusion

Thus, we can conclude, as to, what are the 8 different types of Subsidiary books? How they would help us to record the business transactions in a simplified manner. This would also help us to classify the business transactions according to their nature and type to identify and record them in books of accounts as well.

What are Ledgers?

What is Trial Balance?

What are Financial Statements? Its features, types, uses

What is Income Statement (Profit and loss a/c)?

What is Balance Sheet (Position Statement)?

What is Cash Flow Statement?

What is Bookkeeping? Its features, objectives, uses?

What is Single Entry System? Its features, types, objectives, uses

What is Double Entry System? Its features, objectives, uses