Meaning and Utility of Subsidiary Books

Let us make in-depth study of the meaning and utility of subsidiary books of journal.

Meaning of Subsidiary Books:

Subsidiary books are the sub-divisions of journal, in which specific transactions of similar nature are recorded. We know that the transactions involving cash or bank are recorded in the cash book, a book of original entry. However, it is not possible that all the time, the business transactions should only be in cash. In other words, there are several credit transactions which may also affect the operations of the business to a great extent.


These transactions can be classified as credit sales, credit purchases, sales return and purchase return of goods. If we record all these transactions in the journal then the journal will be unnecessarily over-burdened and bulky. Hence, instead of recording these transactions in the journal, special books are to be opened in which the transactions related to only those books are recorded.

These books are also part books of original entries and are called subsidiary books, special journals or day books. Sometimes, these are also called ‘memorandum books of transactions’, because these are ultimately transferred to their respective ledger accounts.

Subsidiary Books

Utility Subsidiary Books:

(i) Division of Work:

Subsidiary books are sub-divisions of journal in which transactions related to special nature are recorded. The work of accounting may be divided into different parts and for this purpose different persons are deputed. In this way, different persons can do their work at the same period of time; transactions are recorded speedily as soon as they occur.

(ii) Detailed Information:

If we record all the transactions in one journal, full information about the transactions may not be known from the narration of the entry. However, in the case of subsidiary books detailed information about the transactions can be known and hence complete picture of the transactions can be drawn.

(iii) Quick Information:

When all the transactions are recorded in one book viz. journal, journal becomes messy and for getting any particular information we have to spend a lot of time in searching for the required information. However, subsidiary books are specialized journal in which information related to a particular field is recorded so that it becomes much easier to gather information about sales or purchases at any point of time.

(iv) Analysis of all Transactions:


In the case of subsidiary books, the transactions of same nature are recorded in the specific books viz., in the sales book, transactions related to only credit sales are recorded and in the purchase book, transactions related to credit purchases are recorded. Hence, from these books, total of credit sales and total of credit purchases can be known. This information shall greatly help the analyst of the business enterprise.

(v) Proper Control over Various Activities:

Subsidiary books gives us an information about specific nature of transactions at any particular point of time. On the basis of information collected from these subsidiary books, the management can control the business activities to a great extent. For example, credit sales can be controlled from the information gathered from sales book and effective steps may be taken to recover cash from the debtors.

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