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We know that all cash transactions are recorded in the cash book. In addition to these cash transactions, there are innumerable credit transactions. These credit transactions are classified as credit purchases of goods, credit sales of goods, purchases returns of goods and sales returns of goods. Instead of over-burdening journal with .all the credit transactions of goods, we prepare subsidiary books separately. These subsidiary books are Purchases Book, Sales Book, Purchases Return Book, and Sales Return Book.

Business, these days have been greater in size. They have got innumerable transactions. It is quite impossible to record all the transactions in journal or ledger· direct, because this approach will not allow division and sub-division of work and speedy working. The easy, convenient, speedy and appropriate maintenance of accounts requires that journal should be sub-divided in convenient and requisite parts. Separate books should be used for each type of transaction. These books are known as special journal or books of primary record or books of primary entry or subsidiary books.

These subsidiary books having non-cash transactions may be enumerated as under:

1. Purchases book or Purchases Journal

2. Sales book or Sales Journal

3. Purchases return or returns outward book

4. Sales return or returns “inward book 

Advantages of Subsidiary Books or Sub-division of Journal: 

The uses, importance and advantages of the subsidiary books or sub-division of journal are discussed herewith:

  1. Proper and systematic record of the business transactions. All the business transactions are studied and classified as cash and non-cash transactions, which are further classified as purchases, sales and returns. The individual transactions are properly and systematically recorded in the specific concerned book.
  2. Convenient posting. All the transactions of a particular type are recorded at one place i.e., in one of the subsidiary books. For example, all credit purchases of goods are recorded in the purchases book and credit, sales of goods are recorded in sales book. It facilitates posting to purchases account, sales account and concerned personal accounts.
  3. Division of work. In case of entering all the transactions into journal, division of work could not be possible. As there is only one journal, only one person can work on it. If journal is sub-divided, or subsidiary books are prepared, the work will be sub-divided and different persons can work on different books at the same time and the work can be speedily completed.
  4. Availability of detailed information. Subsidiary books provide detailed information about the transactions more than what is available from the narration of journal entry. It is due to the fact that different type of transactions is dealt in different subsidiary books.
  5. Helpful in decision making. Subsidiary books provide complete details about every type of transaction separately, so the management can use these information as a basis for deciding its future line of action. For example, information regarding sales return will enable the management to analyses the causes for return of these goods. The management can adopt effective measures to remove weaknesses responsible for the poor performance.
  6. Availability of requisite information at a glance. In case all the transactions are recorded in the journal, it would have been very difficult and result in unnecessary delay in obtaining requisite information regarding sales, purchases and returns. The maintenance of subsidiary books helps in obtaining the necessary information at a glance.