Subsidiary books definition:
In each separate journal, one particular class of business transaction is recorded, that means that purchase journal may be maintained to record credit purchases of goods, Sales journal may be maintained to record credit sales of goods and cash book for recording cash transaction. Instead of recording all transaction in one journal, they are recorded in separate journal know as subsidiary books.
Subsidiary books, it is nothing but a ledger, which can be maintained by big organization concerns.
There are 7 types of subsidiary books:
1. Cash Book:
The cash book mean by “to record all cash transactions- whatever be their nature”.In Cash book we record cash receipts and payments, Bank receipts and payments, contra entries and cash discounts transactions.
2. Purchases Book:
The Purchase book mean by “to record all transactions of credit purchase”.In purchase book, we record credit purchases information. Cash purchase information record in cash book.
The sales book mean by “to record all transactions of credit sales”. In sales book, we record credit sales information. Cash sales information record in cash book.
4. Purchases returns Book:
The Purchase returns book mean by” to record all transactions of purchase returns to suppliers”. It is also called returns outward book or purchases returns day book.
5. Sales returns Book:
The sales returns book meant by “to record all transactions of sales returns from customers”. Sales returns book is also called returns inwards book or sales returns day book.
6. Bills Receivable book:
Bills receivable book mean by “to record of the bills received from debtors”. When a bill is received from debtor, details of it are recorded in the bills receivable book.
7. Bills payables book:
Bills payable book mean by “to record of bills accepted by us”. When a bill drawn by our creditor is accepted particulars of the same are recorded in this book.