Subsidiary Books

Learn how business transactions are classified and recorded in specialized books

📘 What are Subsidiary Books?

Subsidiary Books are special books used to record transactions of a similar nature separately and systematically.

Instead of recording every transaction directly in the Journal, similar transactions are recorded in separate books. This makes bookkeeping easier, faster and more organized.

🎯 Why are Subsidiary Books Needed?

• They divide accounting work into different sections.
• They make recording of transactions easier.
• They save time and reduce repetitive work.
• They make checking and locating transactions easier.
• They provide better classification of transactions.

📚 Main Types of Subsidiary Books

The commonly used Subsidiary Books include:

1. Purchases Book
2. Sales Book
3. Purchases Return Book
4. Sales Return Book
5. Bills Receivable Book
6. Bills Payable Book
7. Cash Book
8. Journal Proper

🛒 1. Purchases Book

The Purchases Book records credit purchases of goods made by the business.

Example: Purchased goods on credit from Ravi for ₹20,000.

Important: Cash purchases are not recorded in the Purchases Book. They are recorded in the Cash Book.

💰 2. Sales Book

The Sales Book records credit sales of goods made by the business.

Example: Sold goods on credit to Amit for ₹15,000.

Important: Cash sales are recorded in the Cash Book, not in the Sales Book.

↩️ 3. Purchases Return Book

The Purchases Return Book records goods returned to suppliers out of goods previously purchased on credit.

Example: Goods worth ₹3,000 returned to Ravi because they were defective.

↩️ 4. Sales Return Book

The Sales Return Book records goods returned by customers out of goods previously sold on credit.

Example: Amit returned goods worth ₹2,000 because they were defective.

📄 5. Bills Receivable Book

The Bills Receivable Book records bills of exchange and other bills receivable by the business.

It provides a systematic record of amounts that the business expects to receive through bills.

📄 6. Bills Payable Book

The Bills Payable Book records bills accepted by the business that are payable to other parties.

It helps the business keep track of bills that have to be paid on their respective due dates.

💵 7. Cash Book

The Cash Book records cash and bank transactions.

We have already studied Cash Book separately in the previous topic.

📖 8. Journal Proper

Journal Proper is used for recording transactions that cannot conveniently be recorded in any of the other Subsidiary Books.

Examples may include opening entries, closing entries, adjustment entries and certain transfer entries.

📋 Quick Revision

Book	Main Purpose
Purchases Book	Credit purchases of goods
Sales Book	Credit sales of goods
Purchases Return Book	Goods returned to suppliers
Sales Return Book	Goods returned by customers
Bills Receivable Book	Bills receivable
Bills Payable Book	Bills payable
Cash Book	Cash and bank transactions
Journal Proper	Other transactions

⭐ Remember

Credit purchases of goods → Purchases Book

Credit sales of goods → Sales Book

Cash transactions → Cash Book

🧠 Practice Questions

1. Purchased goods on credit from Ravi for ₹20,000. Which Subsidiary Book will be used?

2. Sold goods on credit to Amit for ₹15,000. Which Subsidiary Book will be used?

3. Returned goods worth ₹3,000 to a supplier. Which Subsidiary Book will be used?

4. A customer returned goods worth ₹2,000. Which Subsidiary Book will be used?

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