What are the aims & objectives ( purpose) of preparing Subsidiary Books?

Let us know, as to, What are the aims and objectives ( purpose) of preparing and maintaining Subsidiary Books? This would help us to know the main objective or purpose of recording the transactions in these books

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 aims and objectives of subsidiary books

What are the aims & objectives ( purpose) of preparing Subsidiary Books?

1. These books are maintained to record transactions of similar nature, repetitive in nature. For example, a Sales book is maintained to record only credit sales of goods by traders. Similarly, a Purchase book is maintained to record credit purchases of goods. All the cash related transactions are recorded in the cash book.

Thus, the main objective is to differentiate transactions of similar nature into different categories. For example, transactions relating to credit sales and purchases are recorded in the sales book and purchase book. Cash receipts and payments are recorded in the cash book.

2. These books are generally maintained by Big Organizations to record a large number of transactions. For example, small-sized organisations record all the transactions in Journal and then post them to Ledger where the transactions are very less in number. But Big organisations have a huge number of transactions to record, which would be possible through separate books like sales book, purchase book, cashbook, journal proper to record them. This helps to make record-keeping easy and flexible.

3. The purpose of these books is to save time and avoid clerical work involved in recording a huge number of transactions in Journal, This helps to divide the work, reduce errors, increase efficiency and ease of future reference of transactions due to several separate books being maintained such as cashbook, purchase and sales book.

4. The other objectives would include recording the transactions in a smooth, easy, efficient manner. To maintain books of accounts in separate registers for each type of transaction. To make work divided into different categories and this enables division of work into different people. To identify cash and credit transactions, bills receivable and payables, other transactions. It also helps to avoid the possibility of occurrence of frauds and errors due to division of work and internal checks.

Conclusion:

Thus, now we conclude as to what are the aims & objectives ( purpose) of preparing Subsidiary books by many big organisations as well. Thus the main objective of these books is to record transactions which are repetitive and similar in nature. This would also help to reduce errors ,save time, enhance efficiency in recording business transactions.

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