Books! Listening to this word may make us lazy sometimes, but it is worth having the books for any kind of topic you are interested in or any topic on which need arises as per your academic studies. The more are the books; the less is the ambiguity to understand and accept the subject. Having piles of books without any reading would make you left doubtful.Â Have few of books but read them, write on them and be smart as always!
Talking about the important books while maintaining the accounting system of the company are many, like Journal Book, Ledger, Final Accounts, Balance Sheet, Trial Balance, etc.. But a book which is sub divided from a journal book is Subsidiary book. It is a book where the primary transactions are recorded in the category they belong to.
There are many companies which find it difficult to post each and every transaction in the Journal book and then in ledger accounts. Journal book becomes huge and thick frequently; hence they subdivide the journal entries into the subsidiary books in specific categories. Entries in these are recorded in chronological order.
These books are also called as Prime Entry Books or Books of Original Entry. It regulates the Journal Book in an accurate manner.Now, this may definitely help in subsidiary books homework answers.
Types of Subsidiary Books:
This type of subsidiary book is used to record the pure cash transactions whether it is a receipt or payment. Further, there are different types of Cash book available in the companies according to their Nature of business. Books like three columns cash book, two columns cash book or petty cash book.
- In three columns, headings mentioned are Cash column, Bank column, and Discount column.
- Two columns book has Cash and Discount column.
- Petty cash book is for recording the day to day expenses like Postage, Printing, Stationery, Staff Refreshment, Travelling Expenses,
Purchase day book:
This book is maintained to enter the transactions of Credit Purchase of Goods and services only, in which the company deals with. Transactions of Cash Purchases or Credit Purchases of any assets are not in the protocols.
Purchase returns books:
The name itself says that the goods purchased on credit are returned to the supplier. These transactions are recorded in this purchase returns books.
Sales Day book:
Itâ€™s same like purchase day book. Sales Day book does not include any cash or credit sale of the Assets. It only includes credit sales of Goods and services.
Sales return book:
When the customers return the goods purchased from the company on credit, transaction of such scenario is recorded in Sales return book.
These kind of subsidiary books are to record the acceptance given to suppliers for credit purchases.
Vice-versa Bill receivables are from the customersâ€™ side for credit sales.
So folks, Wasnâ€™t it very simple to understand Subsidiary books. We know that initially, you would have thought of many complicated commercialized terms to learn and understand for. However, it is much easier to understand now.
Anyways, we have more to know on this interesting concept which might help you in subsidiary books homework answers. So stay tuned!! Take a water break and come back to this blog again.
Principles for Subsidiary Books Homework Answers:
Well!Â We just love and adore this Principle Word. Because this is what makes an individual a disciplined and a committed personality if followed whole heartedly. It is not only associated with individuals but also with studies, trends, professionalism.
Let us spot on the aspect which is the need of an hour for subsidiary books home work answers.Since there are so many types of Books in Subsidiaries books.
Points to note:
Letâ€™s learn few general points.
- The purchased book is recorded with the credit purchases of Stock and all credit; cash purchases are recorded in Ledger in Chronological order. Purchase Ledger also has the daily accounting balance of Purchase book.
- Same guidelines and principles for Sales Book and Sales Ledger.
- Companies having large operations and huge commercial transactions cannot just depend on Journal Entries to maintain accurate records. Here, Subsidiary books play a vital role to have a smooth flow and accurate understanding of all accounting Transactions.
- Subsidiary books should always be well maintained, easy to approach and practical.
- These books ensure proper accountability of each department since there is a specialization of every aspect of running business. Like Purchase Department, Sales Department, Hence random audits give result of the productivity of each department which also helps in identifying and rectifying the errors if any.
- Since the concept of Subsidiaries books is invented to bridge the time and effort gap between Journal Books and Ledger Books, it has to be ensured that the respective transactions are properly recorded from journal book to respective Subsidiary Book.
- Yeah! An Example is required here. If there are 10 entries in the Journal Book out of which 2nd and 5th are of PURCHASES, and 3rd and 6th are of Bills Payable, Purchase entries should be transacted in Purchase Books, and likewise, Bill payable entries should be transacted in Bills Payable.
We really donâ€™t feel any further explanation or examples are required to elaborate this easy concept of subsidiary books homework answers. You all just to need to ensure that you are completely through with the terms like Purchase, Sales, Bills Payable, Bills Receivable, Petty cash, etcâ€¦. for which we are sure that you are!