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Subsidiary Books/Sub-Division of Journal

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Get proper knowledge of Account

What is accounting or account? In clear words, Account means keeping records of a company related to the cash transactions and credit transactions. However, the hues of credit transactions are –

  • Credit purchases of goods
  • Credit sales of goods
  • Purchases returns of goods
  • Sales returns of goods

To keep all records in a proper way or to avoid overloading journal, the credit transactions related to goods are recorded in subsidiary books. The different subsidiary books are sales book, purchase book, sales return and purchase return book.

Types of the journal book

For transactions, of some particular types of books are used, and these are based on the exact type of transaction.  These books are special and known as primary record books or primary entry or special books for journals. It is also known as of sub-division of journals. Sometimes the journal records can be the non cash, and in case of these, the counted transactions comes under the following parts as –

  • Purchase journal or purchase book
  • Sales journal or sales book
  • Return outward book or return outward journal
  • Returns inward book or sales return

What are the benefits of sub- divisions of book and how it is used?

Reasons of using subsidiary books are many. These are completely advantageous because these make a difficult task easier and the accountant can maintain them easily. To understand the benefits of sub-divisions or subsidiary books, knowledge of these subdivisions is very important. Only after that, these transactions get its proper place, and the accountant can easily keep maintaining these records appropriately. So, here are some proper use and benefits of business transactions. These are as follows –

  • Business transaction records are arranged systematically  

Keeping records of business transactions a systematic way is very important. These transactions are classified in two different parts non cash and cash transaction. These are again divided in sales, returns and purchase. Now, each record can easily be entered in the suitable book. So, the faultless knowledge is very important for the accountant to get rid of any type of error.

  • Subsidiary books provide the exact and detailed information

Different subsidiary books have some specific purposes, and thus it is important to know that which type of record is perfect for a particular record. The books provide more accurate information than the journal entry.

  • Posting is done to maintain the records in a convenient manner

Posting must be convenient, and thus each section of a posting is important for each record. It means the requisite posting of sales must be there in the sales book. This pattern gets followed by all other kinds of entries.

  •  Work is divided in a proper way

Division of work is important, and subdivision makes it completely perfect and convenient. In case of journal entry, only one person can do the transaction. To complete the work in a proper way and in a proper speed journal is subdivided and different people can work for different divisions, and now each transaction can easily be completed in a proper manner.

  • It becomes easier in obtaining any record

Retrieving records become very easy and convenient when each record follows a particular subdivision. The person does not have to search a single record for the complete journal.

  • It becomes very easy to take proper decision 

Undoubtedly, when the management has different files and each record relates to a particular subdivision, then making decisions for future use becomes very easy for the whole management system.

Why are sub-divisions important?

The size of business is increasing day by day, and it is also true that transactions need to be done properly. However, size is vast, and it becomes very difficult to record in a journal directly because a number of transactions increase. So, the speedy manner of task will be difficult if anyone desires to complete the record directly. Even a pile of transactions do not allow doing the entry directly. But, it does not mean that it becomes impossible to complete the transaction in a right manner. So, to make it perfect as well as convenient one should know about the division of the journal in the proper sub-divisions.

Now, everyone can easily get that how much more appropriate is subsidiary books of account. It is also important for a company to maintain its credit and cash transaction.

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