Types of Subsidiary Books: Purchases Book, Sales Book (With Tax Rate), Purchase Returns Book, Sales Return Book

Subsidiary books, also known as special journals, are specialized accounting records used to systematically document specific types of transactions before they are posted to the general ledger. These books, such as the cash book, sales book, and purchase book, enhance efficiency in recording financial data, minimize errors, and facilitate better organization. By categorizing transactions, subsidiary books streamline the bookkeeping process, making it easier for businesses to manage their financial activities and maintain accurate financial statements.

Purchases Book:

Purchases book, also known as the purchase journal, is a subsidiary book used to record all credit purchases of goods or services made by a business. It captures essential details such as the date of purchase, supplier name, invoice number, and amount. This book helps in organizing purchasing transactions, tracking inventory levels, and managing accounts payable. By summarizing credit purchases, the purchases book simplifies the posting process to the general ledger, enhancing the accuracy of financial records and facilitating effective financial management.

Purchases Book Example

Sales Book (With Tax Rate)

Sales Book, also known as the sales journal, is a subsidiary book used to record all credit sales of goods or services. When including tax rates, entries in the sales book will typically reflect the sales amount, applicable tax, and total amount payable by the customer. Below is an example of a sales book with a 10% tax rate, including entries in table format:

Sales Book Example

Purchase Returns Book

Purchase returns book, also known as the returns outward book, is a subsidiary book used to record all goods returned to suppliers. These returns may occur due to reasons such as defective products, incorrect quantities, or unsatisfactory quality. The purchase returns book captures essential details, including the date of return, supplier name, invoice number, and the value of goods returned. This systematic record helps businesses track returns, adjust their inventory, and manage accounts payable effectively, ensuring accurate financial reporting and compliance with accounting standards.

Purchase Returns Book Example

Sales Return Book

Sales Return Book, also known as the returns inward book, is a subsidiary book used to record all goods returned by customers. These returns can occur due to reasons such as defective items, incorrect shipments, or customer dissatisfaction. The sales return book captures crucial details, including the date of return, customer name, invoice number, and the value of goods returned. This systematic record helps businesses track returned sales, adjust inventory levels, and manage accounts receivable effectively, ensuring accurate financial reporting and compliance with accounting standards.

Sales Return Book Example