Types Of Subsidiary Books

Definition of Subsidiary Books

Subsidiary Books are those books of original entry in which transactions of similar nature are recorded in one place and chronological order. In a big concern, recording all transactions in one Journal and posting them into various ledger accounts will be very difficult and involve a lot of clerical work.

This is avoided by sub-dividing the journal into various subsidiary journals or books. The subdivisions of a journal into various subsidiary journals for recording transactions of similar nature are called ‘Subsidiary Books.’. Thus following are the subsidiary books.

Types of Subsidiary books

1. Purchases Book: Purchases book is one of the important subsidiary books. It is also known as ‘Bought book’ or ‘Invoice journal’ This book is used for the recording of goods purchased on credit.

2. Purchases Return Book: Purchases returns book also called ‘Returns outwards book or journal’. when the trader purchases goods, he verifies whether they are in good condition and agree with the terms and conditions of the order he placed. This book is used to record the return of goods purchased by a business house.

3. Sales Book: This book is also known as a ‘sales journal or sales register’. Sales book is maintained to record only credit sales of goods in which the trader deals. This book is used for the recording of goods sold on credit.

4. Sales Return Book: This book is used to record goods that have been sold are returned by customers.

5. Bills Payable Book: This book is used to record all bills drawn by the creditors and accepted by the Trader.

6. Bills Receivable Book: This book is used for recording all bills drawn and received by the trader.

7. Journal Proper: This book is used to record all transactions which are not entered in any other subsidiary book listed above.

8. Cash Book: Business people design their convenience and need. The following are the different types of cash books maintained in business.

  1. Simple cash book.
  2. Cashbook with cash and discount columns.
  3. Cashbook with cash, discount, and bank columns.
  4. Petty cash book.

i. Simple cash Book: The simple cash book makes a record of only cash transactions and is just like a cash account. All cash receipts are recorded on the debit side and all cash payments are recorded on the credit side.

ii. Petty cash Book: Petty cash book is maintained by the business to record petty cash expenses of the business such as Postage, Telegrams, Stationary, Carriage, etc. In every business, there may be many payments like above which are of small amounts. The reason why petty cash transactions are not recorded in the main cash book is that the practice will waste a lot of valuable time of the cashier and posting clerk. The person who handles the petty cash is called the ‘Petty cashier’. The book in which the receipts and payments of petty cash are recorded is known as the ‘petty cash book’.



1. Saving of Clerical Labour: Subsidiary books affect a considerable saving of clerical work in postings and narration. Transactions of any one class such as credit purchases, credit sales, cash transactions, etc., are recorded through separate subsidiary journals and there is no need for giving narration.

2. Division of Clerical Work: Separate journals are used for recording the transactions of each particular type, the division of clerical labor amongst several office clerks becomes possible. This makes a speedy record of day-to-day transactions practicable.

3. Minimizes Frauds: These books make possible the introduction of an internal check system under which the system of rotation of writing up books can be adopted. This helps to minimize errors and detecting fraud.

4. Facilitates Further Reference: As transactions of similar nature are grouped in a separate book, further reference to any particular item is considerably facilitated.