TYPES OF SUBSIDIARY BOOKS
(1) Sales day book
(2) Purchases day book
(3) Sales returns book/Returns inward book
(4) Purchases returns book/Returns outward book
(6) Cash book
(7) Petty cash book
Journals, Cash book and petty cash book will be discussed seperately. Cash book and Petty cash book are dual books. They perform the purposes of a subsidiary books and also the purposes of a ledger book.
SALES DAY BOOK
Sales day book is also referred to as sales journal. This is the book were all credit sales are entered before posted to the turnover account and individual account receivables account. The source document used is the sales invoice.
In the book, trade discounts are computed and the net is what is recorded as the sales figure. The total of this is posted to the turnover account in the general ledger.
PURCHASES DAY BOOK
Purchases day book also called purchases journal is a book used to enter credit purchases. The source document used is the purchase invoice.
RETURN INWARDS DAY BOOK
Also called sales return day book or journal. The source document used is the credit note and it records return inwards transactions.
RETURN OUTWARDS DAY BOOK
This book is used to record return inwards events. The source document for it is the debit note.
ADVANTAGES OF SUBSIDIARY BOOKS
(i) Subsidiary books record the total of transactions in one place rather than the individual accounts.
(ii) Explanation of the transactions recorded in the books. Example is the naration in a general journal.
(iii) Subsidiary books provide records of transactions in chronological order.
(iv) They also help to correct error. The total in the book of original entry can be reconciled with the total in the individual