Subsidiary books could be thought of as books of prime entry where transactions of a particular category are noted. Put simply, to avoid wasting time and energy, the transactions which are of similar character are recorded in separate books, they are called subsidiary books or subdivision of journal. It is advisable to make use of special subsidiary books, in addition to the journal, for recording, various types of transactions.
Business transactions or the economic events of a business entity are many in number. As a normal course of business activities, all the transactions are first to be entered in journal, being called as book of prime or original entry, that in turn are to be posted to corresponding ledgers. But, this activity can practically be difficult or monotonous being repetitive in nature. It is thus the main journal, having been subdivided categorically, provides the information through a separate book or journal with periodical details. These books are called as Subsidiary books or Subsidiary journals. Following are a few subsidiary books or journals for accounting process.
Purchase return book which is also called as return outwards book.
Sales return book which is also referred as return inwards book
Bills Receivables book
Bills payables book
There are various advantages of using subsidiary books or subsidiary journals for the process of accounting.
One of the best advantages of using them is that the division of work is possible because the related activities may be delegated to the concerned personnel or allowing many persons to involve in the activities as per the need and importance. It thus helps to keep the records brief being classified according to the nature of transactions in a separate book permitting to locate any desired transaction at any point of time in an easy and simple manner.
It is appropriate to mention here that the use of subsidiary journals is also useful for the concerned staff to improve his skills and efficiency. When a particular task is done over and over again, the activity may lead to improve efficiency while it enables one to eliminate mistakes. That is how the efficiency can be enhanced amid the accountants of a business organization.
As regards the process of controlling and monitoring the activities of the subordinates, it can be easier for the superior as he can establish a checking system internally with no trouble which in turn will lead to increase the efficiency of the subordinates and the effectiveness of the entire process of accounting.
There are various accounting processes, they are to be accomplished in a smooth manner simultaneously; it is with the help of subsidiary books the process becomes simple and easy to carry out the activities as quickly as possible. The use of subsidiary books can be time and labor saving and with which an accurate accounting system is maintained reducing the cases of frauds and making any manipulations almost impossible.
The services of the concerned staff involved in the activities of using subsidiary books are creditable and praiseworthy as it is through their efforts the accuracy of the records is enhanced significantly. It is their great contribution in ascertaining the overall financial health and performance and efficiency of a business organization.
Generally, the users of accounting information in the society can be classified into two categories, which include the internal users and external users. Internal users refer to the people in the organization producing the accounting reports while the external users are the people, institutions and entities outside the organization’s boundaries who use the information for the purpose of decision-making..
Accounting is very much connected with our personal lives in so far as it is in respect of every business. We all with intent or unknowingly generate accounting ideas in a way when we plan what we will do with money.