Subsidiary Books

SUBSIDIARY BOOKS
In business most of the transactions relate to

receipt of cash, payments of cash, sale of goods
and purchase of goods. So it is convenient to
have separate books for each such class of
transaction, one for receipts and payments of
cash, one for purchase of goods and one for sale
of goods. These books are called subsidiary
books.
TYPES OF SUBSIDIARY BOOKS

Cash Book: Recording all Cash receipts & cash
payments
Purchase
Day book Recording all credit
purchases
Sale Day Book Recording all credit sales
Purchase Return Book Recording all Purchase
return
Sales Return book Recording all Sales return
Bills
Receivable book - Recording all
Receivable
Bills Payable book - Recording all Payable
CASH BOOK
Cash book is a subsidiary book, which
records the receipts and payment of
cash. With the help of cash book cash
and bank balance can be checked at
any point of time.
TYPES OF CASH BOOK

Cash book can be of Three types:
1. Simple (single column) Cash Book.
2. Two column (Double column) cash book.
3. Three column (Triple column) cash book.
SIMPLE (SINGLE COLUMN)

CASH BOOK
A simple (Single column) cash book is
prepared like any ordinary account.
The receipts are recorded in the Dr
side and the payments are recorded in
the Cr side of the cash book.
SIMPLE CASH BOOK

Format: Simple (Single column cash book)
Simple Cash Book
Dr.
Date
Particulars
To bal b/d
To.
To
Amt.
Xxx
Xxx
xxx
Date
Particulars
By
By.
By bal. c/d
xxx
Cr.
Amt.
Xxx
Xxx
xxx
xxx
The opening balance of cash is recorded in Dr.

side
All receipts are recorded in Dr side
All payments are recorded in Cr side
SIMPLE CASH BOOK

Balancing the Cash Book
The Cash book is balanced like any
other account. The receipts column
total will be more than the payments
column total. The difference will be
written on the Cr. Side as By Bal c/d.
ILLUSTRATION
Enter the following transactions in simple
Cash Book.
2006
Jan 1 Cash in hand 12000
Jan 5 Received from Ramesh 3000
Jan 7 Paid Rent 3000
Jan 8 Sold goods 7000
Jan 10 Paid Sohan 2000
SIMPLE CASH BOOK

Solution:
Dr.
Simple Cash Book
Date Particulars Amt.

1-1- To bal b/d
2005
5-1- To Ramesh
2005
8-1- To Sales
2005
Date
Particulars
Cr.
Amt.
12000 7-1By Rent

2005
3000 10-1- By Sohan
2005
7000 31-1- By bal. c/d
2005
3000
22000
22000
2000
17000
Exercise:
Enter the following transactions in the
simple cash book.
2005
Dec 1. Cash in Hand 10,000
Dec 2 Received from Ramesh 13,000
Dec 3 Purchased Furniture 15,000
Dec 4 Machinery Sold 10,000
Dec 5 Goods sold 20,000
Dec 6 Salaries paid 1,000
TWO COLUMN CASH BOOK

A two column cash book records
discount allowed and discount received
along with the cash payments and cash
receipts.
Note:
Discount columns are not balanced they
are only totaled

Format: Two (Double) column cash book
Dr.
da
te
Two Column Cash Book

Particula disc cash da
rs
ount
te
To bal b/d
Xxx
To ..
xx
Xxx
xx
xxx
Cr.
Particula disc
rs
ount
By
xx
By bal. c/d
xx
All receipts are recorded in Dr side (cash column)
cas
h
Xxx
Xxx
xxx
All payments are recorded in Cr side (cash column)

The discount columns are totaled but not
balanced.
The cash columns are balanced in the same
manner as indicated for the simple cash book.
ILLUSTRATIONS
Enter the following transactions in a two-column cash

Book.
2005
Jan 1 Cash in hand 15,000
Jan 5 Paid to Mohan 3,000
Discount allowed by him 100
Jan 6 Purchased goods 4,000
Jan 10 Received from Vijay 9,800
Discount allowed 200
Jan 11 Sold goods 4,000
Jan 12 Paid to Shyam 2,950
Discount received Rs. 50
Jan 13 Paid wages 500
Jan 14 Paid to Rajesh Rs 3900 in full settlement of his
Account, which shows a Cr. Balance of Rs. 4000

Solution:
Dr.
date
1-12005
10-12005
11-12005

Particular
s
disc
ount
To bal b/d
To vijay
To sales
200
Cr.
cash
date
Particulars
discou cash
nt
15000
5-12005
6-12005
12-12005
13-12005
14-12005
31-12005
By Mohan
100
9800
4000
By Purchase
By shyam
4000
50
By Wage
By Rajesh
By bal. c/d
3000
2950
500
100
3900
14450
Exercise:
Purchased Furniture
Purchased Goods
Sold Goods for Cash
Purchased Goods
Paid Cash to Ram
Discount allowed by him
Received Cash from Kaviraj and Co.
Allowed Discount
Paid for petty exp.
Cash Purchases
Cash Sales
Recd from Ram & Sons
Paid for Typewriter
Paid for Telephone
Paid Aggarwal brothers
They allowed discount
April
April
April
April
April
1
2
3
4
5
April 6
April
April
April
April
April
April
April
7
8
9
10
11
12
13
2,500
3,000
1,500
2,000
5,600
100
6,000
200
150
1,500
2,000
6,000
8,000
2,000
4,000
THREE COLUMN CASH BOOK

A three column cash Book is a cash
book, which contains bank column
along with cash and discount columns.

Format: Three (Triple) column cash book
Dr.
da Particular
te s

disc
ount
To bal b/d
To
To bal. c/d
xx
bank cash
da
te
Particular
s
Xxx
Xxx
xxx
Xxx
By
.. By bal. c/d
xxx
xxx
Cr.
disc
ount
bank cash
xx
Xxx
xxx
Xxx
Xxx
xx
xxx
xxx
All bank receipts are recorded in Dr side (bank cloumn)
All bank payments are recorded in Cr side (bank column)

All Cash receipts are recorded in Dr side (cash cloumn)
All cash payments are recorded in Cr side (cash column)
BALANCING THREE COLUMN CASH BOOK

- The discount columns are totaled but not balanced.
- The cash columns are balanced exactly in the

same manner as indicated for the simple cash book.
The process is similar for balancing the bank
columns also. It is possible, that the bank may allow
the firm to withdraw more than the amount
deposited, i.e. to have an overdraft. In such a case
the total of the bank column on the credit side will
be bigger than the one on the debit side. The
difference is written on the debit side as To Bal
c/d.
THREE COLUMN CASH BOOK- Contra entry

1) When cash is paid into bank the entry passed
is
Bank A/C Dr. (Bank balance increased)
To Cash A/C (Cash balance decreased)
This type of transaction affects both cash and
bank and these are called contra transactions
2) When cheque is received two entries are
passed
Cash A/C Dr. (When cheque is received)
To Debtors
Bank A/C Dr. (When cheque is deposited)
To Cash
ILLUTRATIONS
Enter the following transactions in a Threecolumn cash book. Cheques are first treated as
cash receipts
2005
Rs.
Jan 1 Cash in hand
20000
Jan 2 Paid into Bank
19000
Jan 3 Receives cheques from Kirti and Co
600
Jan 4 Pays into bank Kirti and Cos Cheque 600
Jan 5 He pays Ratan and Co. by Cheque and is
allowed discount of Rs. 20
330

Solution:
Dr.
date Particul
ars
1-12005
2-12005
3-12005
To bal b/d
4-12005
To cash
To cash
Three Column Cash Book

disc
ount
To kirti &
com
c
bank cash
date Particul
ars
20000 2-12005
19000
4-12005
600
5-12005
600
19600 20600
disc
ount
Cr.
bank cash
By bank
19000
By bank
600
By Ratna
& com.
20
31-1- By bal. c/d

2005
330
19270 1000
20
19600 20600
Exercise:
Enter the following transactions into a
three-column cashbook.
2005 Rs.
Feb 1 Cash in hand 10,000
Feb 2 Receives cheques from Warsi 0f
4700 and Allows him discount Rs. 300
Feb 3 Pays by cheque for cash
purchases 2,000
Feb 4 Sundry exp. paid in cash 500
Purchases Day Book:

Purchases book or purchases day
book is a book of original entry
maintained to record credit purchases.
You must note that cash purchases
will not be entered in purchases day
book because entries in respect of
cash purchases must have been
entered in the cash book.
Purchases Day Book:
Invoice: When credit purchased of goods was

made a supplier sent a statement called invoice
indicating quantity, price, value ,trade & cash
discount and the condition under which payment is
expected.
Trade discount: is a discount offered by suppliers
to the retailers to encourage bulk purchase.
Generally it is concession off the list price, hence
deducted from invoice & not necessary to maintain
further records.
Cash discount: is a discount offered to encourage
early payment of credit sales. Ledger account
should maintained discount allowed & received.
Purchases Day Book:
-No Cash Purchase

-No Fixed Asset Purchase
-No Cash Discount
Purchases Day Book: Format

Date Particulars
Invoice L.F Details Amt
No
.
.
A) Supplier name
@Rs..
@Rs..
Less:trade discount
..
..
B) Supplier name
@Rs..
@Rs..
Less:trade discount
Total
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
xxx
Purchase day book Posting to Ledger

Dat
e
Cr.
Total purchase A/c
Dr.
Particulars
J.F
To Cash A/c
To sundries
(credit purchase)
Amt
Date
Particulars
J.
F
Amt
Xxx
xxx
xxx
Suppliers (individual) A/c
Dr.
Dat
e
Particulars
J.F Amt
Date
Particulars
By Purchase
Cr.
J.F
Amt
xxx
xxx
Purchases Day Book: Illustrations

prepare the purchases day book of a M/s Universal
Book Stores and post it into ledger for July 2009:2009 July 5 Purchased books from Kalyan publisher:
12 Advance Accounting @ Rs 45
24 Double entry Book keeping @ Rs 30
(Trade discount 15%)
2009 July 17 Purchased Furniture on credit of Rs
10,000 from furniture house ltd.
2009 July 22 Purchased books from Kitab mahal:
8 Statistics for bachelors @ Rs 25
10 Economics Intermediate @ Rs 20
2009 July 27 Purchased books on cash from swostik
prakasha:10 Management @ Rs 28
Purchases Day Book of M/s Universal book store for July 2009
Date Particulars
2009
A) Kalyan publisher
July 5 Adv.Accounting 12@Rs45
Double entry 24@Rs30
Less:trade discount @15%
July
22
B) Kitab mahal
statistics 8@Rs25
Economics 10@Rs20

Total
Inv L. Deta Amt

.no F ils
540
480
1020
153
867
200
200
400
40
360
1227
Purchase day book Posting to Ledger

Date
Particulars
27 july
31 july
2009
To Cash
To sundries
(credit purchase)
J.
F
Particulars
J.
F
Amt
Dat
e
Particulars
J.
F
Amt
2800
1227
Date
Particulars
5 july
2009
By Purchase
Cr.
J.F
Amt
867
Kitab Mahal A/c
Dr.
Dat
e
Amt
M/s universal book store A/c
Dr.
Dat
e
Cr.
Total purchase A/c
Dr.
Particulars
J.
F
Amt
Date
Particulars
22 july
2009
By Purchase
Cr.
J.F
Amt
360
Purchases Returns Book:

Purchases returns book is a book in which
the goods returned to suppliers are
recorded. It is also called returns outward
book or purchases returns day book.
Goods may be returned because they are of

the wrong kind or not up to sample or
because they are damaged etc.
Debit Note:
When the goods are returned to the
suppliers, an information is sent to them
known as a debit note. A debit note is a
statement sent by a businessman to another
person, showing the amount debited to the
account of the later.
Purchases Return Book: Format
Date Particulars
.
.
A) Supplier name
@Rs..
@Rs..
Less:trade discount
..
..
B) Supplier name
@Rs..
@Rs..
Less:trade discount
Total
Debit
note
L.F Details Amt
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
xxx
Purchase return Posting to Ledger

Dat
e
Cr.
Return outward A/c
Dr.
Particulars
J.F
Amt
Date
Particulars
J.
F
By sundries
Amt
xxx
xxx
Suppliers (individual) A/c
Dr.
Dat
e
Particulars
To Return
outward
J.F
Amt
xxx
xxx
Dat
e
Particulars
Cr.
J.F
Amt
Purchases Return Book:

Illustrations
Record the following transactions in the books of
Kailash traders.
2009 Jan 6
Returned to shyam & Co :

12 Cup @ Rs 5
20 Plate @ Rs 4
(Trade discount 5%)
2009 Jan 27 Returned to Roshan:
8 Cup @ Rs 5
10 Plate @ Rs 4
Purchases Return Book of Kailash Traders for January

Date Particulars
Inv L. Deta Amt
.no F ils
A) Shyam & Co.
Jan 6 12 Cup@ Rs 5
10 Plate@ Rs 4
Jan
27
B) Roshan
8 Cup@ Rs 5
20 Plate@ Rs 4

Total
60
40
100
5
40
80
120
12
95
108
203
Purchase return book Posting to Ledger

Date
Cr.
Return Outward A/c
Dr.
Particulars J.F
Amt Date
Jan 31
Particulars
J.
F
By sundries
203
Shyam & Co A/c
Dr.
Date
Particulars
Jan 6
To Return
outward
J.F
Amt
Date
Cr.
Particulars
J.F
Roshan A/c
Particulars
Jan
27
To Return
outward
Amt
95
Dr.
Date
Amt
J.F
Amt
108
Date
Cr.
Particulars
J.F
Amt
Sales Day Book:

A sales book is also known as sales day
book is a book of original entry in which all
the details of credit sales are recorded.
Total of sales book shows the total credit
sales of goods during the period concerned.
Sales Day Book:
-No Cash Sales

-No Fixed Asset Sales
-No Cash Discount
Sales Day Book: Format

Date Particulars
.
.
A) Customer name
@Rs..
@Rs..
Less:trade discount
..
..
B) Customer name
@Rs..
@Rs..
Less:trade discount
Total
Invoice L.F Details Amt

No
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
xxx
Sales day book Posting to Ledger

Dat
e
Cr.
Total Sales A/c
Dr.
Particulars
J.F
Amt
Date
Particulars
J.
F
By Cash A/c
By sundries
(credit purchase)
Amt
Xxx
xxx
xxx
Customers (individual) A/c
Dr.
Dat
e
Particulars
To Sales
J.F
Amt
xxx
xxx
Dat
e
Particulars
Cr.
J.F
Amt
Sales Day Book: Illustrations

From the following transactions prepare sales book of Decorate
furniture house for May 2009 and post them to ledger:
May 5 Sold on Credit to Amrit Stationary:
10 Tables @ Rs 45
20 Chairs @ Rs 30
12 Sold to IBM College:
15 chairs @ Rs 30
25 stools @ Rs 20
17 Sold to Cash to Govinda Thapa
5 Tables @ Rs 45
25 Sold old typewriter to Madan Lal
on credit for Rs 1000
Sales Day Book of Decorate Furniture for May 2009

Date Particulars
2009
A) Amrit stationary
May 5 10 table@45
20 chairs@Rs30
B) IBM college
15 chairs@30
25 stools@Rs20
May
12

Total
Inv L. Deta Amt

.no F ils
450
600
450
500
950
95
1050
855
1905
Sales day book Posting to Ledger

Total Sales A/c
Dr.
Date
Particulars J.F
Amt Date
May 17
May 31
Cr.
Particulars
J.
F
By cash
By sundries
(credit purchase)
225
1905
Amrit Stationary A/c
Dr.
Date
Particulars
May
5
To Sales
J.F
Amt
Date
Particulars
Cr.
J.F
Date
Particulars
May
12
To Sales
Amt
1050
IBM college A/c
Dr.
Amt
J.F
Amt
855
Date
Cr.
Particulars
J.F
Amt
Sales returns book

Sales returns book is also called returns
inwards book. It is used for recording goods
returned to us by our customers.
Goods may be returned because they are
of the wrong kind or not up to sample or
because they are damaged etc.
Credit Note:
Customers who return goods should be sent
a credit note. It is a statement sent by a
business to another person showing the
amount credited to the account of the later.
Sales Return Book: Format

Date Particulars
Credit L.F Details Amt
note
.
.
A) Customer name
@Rs..
@Rs..
Less:trade discount
..
..
B) Customer name
@Rs..
@Rs..
Less:trade discount
Total
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
xxx
Sales Return book Posting to Ledger

Dat
e
Cr.
Return inwards A/c
Dr.
Particulars
J.F
To sundries
Amt
Date
Particulars
J.
F
Amt
xxx
xxx
Customers (individual) A/c
Dr.
Dat
e
Particulars
J.F Amt
Date
Particulars
By Return
inwards
Cr.
J.F
Amt
xxx
xxx
Sales Return Book: Illustrations

Ekta Sports Supplier.
2009 Jan 12 Returned From Akash :
2 Cricket bat @ Rs 100
4 Football @ Rs 50
(Trade discount 5%)
2009 Jan 25 Returned From Global college:
1 Volleyball@ Rs 40
2 Football @ Rs 50
Sales Return Book of Ekta sports Suppliers for Jan

2009
Date Particulars
2009
jan
12
Jan
25
A) Akash
2 Cricket bat@Rs 100
4 Football @ Rs 50
B) Global college
1 Volleyball@40
2 Football@Rs50

Total
Inv L. Deta Amt

.no F ils
200
200
40
100
140
14
400
126
526
Sales Return book Posting to Ledger

Date
Particulars
Jan 31
2009
To sundries
J.
F
Dat
e
Particulars
J.
F
Amt
Akash A/c
Particulars
J.
F
Amt
Date
Particulars
Jan 12
2009
By Return
inwards
Cr.
J.F
Amt
400
Global College A/c
Dr.
Dat
e
Amt
526
Dr.
Dat
e
Cr.
Ekta Sports Suppliers A/c
Dr.
Particulars
J.
F
Amt
Date
Particulars
Jan 25
2009
By Return inward
Cr.
J.F
Amt
126
Purchases Day Book: Exercise

prepare the purchases day book of a Wears Fashion
Shop and post it into ledger for March 2009:2009 March 5 Purchased from Kathmandu Mahal
20 Shirts@ Rs 850 (Trade discount 10%)
24 Pants @ Rs 1300
2009 March 17 Purchased Furniture on credit of Rs
10,000 from wood land ltd.
2009 March 22 Purchased from R.B Complex:
10 Jackets @ Rs 1500 (Trade discount 10%)
10 Trousers @ Rs 300
2009 March 27 Purchased on cash from Suraj Arcade
10 T-shirts @ Rs 280
Purchases Return Book: Exercise

Mr Arun & Co.:
2010 Jan 6
Returned to Maheshowr & Co:

4 Chair @ Rs 500
5 Table @ Rs 400 (Trade discount 5%)
2010 Jan 27 Returned to Roshan & Co:
2 Table fan @ Rs 2250
1 Heater @ Rs 2500
Sales Day Book: Exercise

From the following transactions prepare sales book of Innovative
Computer suppliers for May 2009 and post them to ledger:
May 5 Sold on Credit to United College
5 Lenovo computer @ Rs 50,000
6 Ordinary computer @ Rs 30,000
11 Sold to Cash to Mr. Bibek.
1 Laptop Compaq @ Rs 45
13 Sold to IBM College:
8 Laptop Compaq @ Rs 60,000 (Trade discount
10%)
10 Lenovo Computer @ Rs 50,000
25
Sold old Delivery Van to Mr Khan.

on credit for Rs 200,000
Sales Return Book: Exercise

Wood land Furnishing House
2009 Jan 12 Returned From Bishnu :

2 Visitors Chair @ Rs 2500
1 Revolving Chair @ Rs 5000
(Trade discount 5%)
2009 Jan 25 Returned From Caspian College:
5 Armed Chair @ Rs 1400
2 Officer Desk @ Rs 12500 (Trade discount 5%)

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SUBSIDIARY BOOKS

In business most of the transactions relate to

TYPES OF SUBSIDIARY BOOKS

TYPES OF CASH BOOK

SIMPLE (SINGLE COLUMN)

SIMPLE CASH BOOK

The opening balance of cash is recorded in Dr.

SIMPLE CASH BOOK

SIMPLE CASH BOOK

Simple Cash Book

Date Particulars Amt.

12000 7-1By Rent

TWO COLUMN CASH BOOK

TWO COLUMN CASH BOOK

Two Column Cash Book

All receipts are recorded in Dr side (cash column)

All payments are recorded in Cr side (cash column)

Enter the following transactions in a two-column cash

TWO COLUMN CASH BOOK

Two Column Cash Book

THREE COLUMN CASH BOOK

THREE COLUMN CASH BOOK

Two Column Cash Book

All bank receipts are recorded in Dr side (bank cloumn)

All bank payments are recorded in Cr side (bank column)

BALANCING THREE COLUMN CASH BOOK

- The cash columns are balanced exactly in the

THREE COLUMN CASH BOOK- Contra entry

THREE COLUMN CASH BOOK

Three Column Cash Book

31-1- By bal. c/d

Purchases Day Book:

Purchases Day Book:

Invoice: When credit purchased of goods was

Purchases Day Book:

-No Cash Purchase

Purchases Day Book: Format

Purchase day book Posting to Ledger

Total purchase A/c

Suppliers (individual) A/c

Purchases Day Book: Illustrations

Less:trade discount @10%

Inv L. Deta Amt

Purchase day book Posting to Ledger

Kitab Mahal A/c

M/s universal book store A/c

Total purchase A/c

Purchases Returns Book:

Goods may be returned because they are of

Purchases Return Book: Format

L.F Details Amt

Purchase return Posting to Ledger

Return outward A/c

Suppliers (individual) A/c

Purchases Return Book:

Returned to shyam & Co :

Purchases Return Book of Kailash Traders for January

Less:trade discount @10%