Meaning of Subsidiary Books - SS1 Accounting Lesson Note

Subsidiary books, also known as sub-ledgers, are books that are used to record specific types of transactions in a business. These books are subsidiary to the general ledger, which is the main accounting record for a business.

There are several types of subsidiary books, each designed to record a specific type of transaction. For example, a sales journal is used to record all sales made on credit, while a purchases journal is used to record all purchases made on credit. Similarly, a cash receipts journal is used to record all cash receipts, while a cash disbursements journal is used to record all cash payments.

At the end of each accounting period, the information in the subsidiary books is summarized and transferred to the general ledger, where it is used to prepare financial statements and other reports. This process is known as posting, and it ensures that the information in the general ledger is accurate and up-to-date.

Subsidiary books are useful because they allow for the efficient and accurate recording of transactions, which can help streamline the accounting process. They also provide a detailed record of transactions, which can be useful in tracking and analyzing business activities.