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SUBSIDIARY BOOKS
 Meaning of Special Journals
When no. of transactions are large, it is
practically impossible to record all the
transactions through one journal.
To overcome the shortcomings of the use of
Journal, the Journal is subdivided into special
journals
Special Journals refer to the journal meant
for specific transactions of similar nature.
 Types of Special Journals
1. Cash Book –Cash and Bank transactions
2. Purchase Book – Credit Purchase of Goods
3. Sales Book – Credit Sale of Goods
4. Sales Return Book – Goods returned by customers
(sold on credit)
5. Purchase Return Book – Goods returned to suppliers
(purchased on credit)
6. Bills Receivable Book – Bills drawn on customers
7. Bills Payable Book – Bills accepted in favor of
suppliers
8. Journal Proper – Transactions not covered elsewhere
 PURCHASES BOOK
Only CREDIT purchases of goods are to be
recorded in this journal. Cash purchases are
recorded in cash book.
The term ‘goods’ covers only those items that
are procured by the business for resale
Entries in the purchase book are made on the
basis of invoices received from the suppliers
with the amounts net of trade / quantity
discounts.
 Format of Purchases Book
PURCHASES BOOK

Date Purchase Name of L.F. Details Amount

Invoice No. Supplier (Rs.) (Rs.)
Illustration 1: Record the following transactions for
the month of July,2006 in the purchases book of M/s
Neha Electronics
July 5 Purchased from M/s Nelson Electronics
10 Color T.V. @ Rs.7,000/- per pc.
5 flat screen T.V. @ Rs.15,000/- per pc.
Trade Discount on all items @ 15%
July 20 Purchased from M/s Weston Electronics
5 Weston stereos @ Rs.5,000 per pc.
4 Weston color T.V. @ Rs.14,000 per pc.
Trade Discount @ 20%
 SALES BOOK
Sales Book is used for the purpose of
recording the sale of goods on credit.
It records neither the cash sales of the goods
nor sale of any asset other than
merchandise.
Entries in the sales book are made on the
basis of invoices issued to the customers
with the amounts net of trade / quantity
discounts.
 Format of Sales Book

SALES BOOK

Date Sales Name of L.F. Details Amount

Invoice Customer (Rs.) (Rs.)
No.
Illustration 2: Record the following transactions for the
month of July,2006 in the sales book of M/s Nayyar
Electronics
July 4 Sold goods to M/s Ramesh Electronics
10 Philips Iron @ Rs.300 per pc.
15 Philips Mixer @ Rs.1,500 per pc.
July 10 Sold to M/s Surbhi Electronics
5 color T.V. @ Rs.12,000 per pc.
10 music system @ Rs.7,000 per pc.
July 20 Sold to M/s National Electronics
5 washing machines @ Rs.6,000 per pc.
15 Electric ovens @ Rs.2,000 per pc.
It is the practice followed by M/s Nayyar Electronics
to allow 10% trade discount on all sales.
Purchase Return Book
Used for the purpose of recording the
returns of merchandise purchased on
credit
It records neither the return of goods
purchased on cash basis nor the return of
any asset other than merchandise.
Entries are made on the basis of Debit
Notes issued to the suppliers
 Format of Purchase Return Book
PURCHASE RETURN BOOK

Date Debit Note Name of L.F. Details Amount

No. Supplier (Rs.) (Rs.)
Illustration 3: Record the following in
Purchase Return Book :
July 15 Returned 2 washing machines
purchased from M/s Manohar Electronics
at the list price of Rs.7,000/- per machine
less trade discount 20%
July 25 Returned 6 tape recorders to M/s
Sonika Electronics purchased at
Rs.1,000/- per tape recorder
Sales Return Book
Used for the purpose of recording the returns
of merchandise sold on credit
It records neither the return of merchandise
sold on cash basis nor the return of any
asset other than merchandise.
Entries are made on the basis of Credit
Notes issued to the customers
 Format of Sales Return Book
SALES RETURN BOOK

Date Credit Note Name of L.F. Details Amount

No. Customer (Rs.) (Rs.)
Illustration 4: Record the following in Sales
Return Book:
July 1 Ramesh & Co. returned 500 units
sold @ Rs.50 per unit
July 25 Naresh & Co. returned 300 units
sold @ Rs.55 per unit
CASH BOOK
A Cash Book is a special journal which is used
for recording all cash receipts and cash
payments
Cash Book is both a Journal and Ledger.
The Cash Book is a book of original entry since,
transactions are recorded for the first time from
source documents
The Cash Book is a ledger as it is designed in
the form of a Cash Account and records Cash
Receipts on the debit side and Cash Payments
on the Credit Side.
Types of Cash Book
Single – Column Cash Book
Double – Column Cash Book
Three – Column Cash Book
Petty Cash Book
Single – Column Cash Book
This Cash – book has one amount column
on each side.
All cash receipts are recorded on the debit
side
All cash payments are recorded on the
credit side
 Format of Cash Book

Dr. Cash Book

Cr. Particulars
Date L.F Amount Date Particulars L.F. Amount
. (Rs.) (Rs.)
Double – Column Cash Book
This Cash – book has two amount columns (one for
cash and another for discount) on each side.
All cash receipts and discount allowed are recorded
on the debit side
All cash payments and discount received are
recorded on the credit side
 Format of Two-column Cash Book

Dr. Cash Book with Discount Column Cr.

Date Particulars L.F Discou Amoun Date Particulars L.F. Discou Amou
. nt t nt nt
(Rs.) (Rs.) (Rs.) (Rs.)
Three – Column Cash Book
This Cash – book has 3 amount columns (Cash,
Bank and Discount) on each side.
All cash receipts, deposits into bank and discount
allowed are recorded on the debit side
All cash payments, withdrawals from bank and
discount received are recorded on the credit side
3-Column cash book serves the purpose of Cash
Account and Bank Account.
 Format of Three Column Cash Book
Dr. Three Column Cash Book Cr.

Date Particulars L.F. Discou Cash Bank Date Particulars L.F. Discou Cash Bank
nt (Rs.) (Rs.) nt (Rs.) (Rs.)
(Rs.) (Rs.)
 Illustration 5:Prepare a Three – Column Cash Book from the
following transactions:
2006
Jan.1. Cash Balance Rs.9,000/-
Bank Balance Rs.11,000/- (Cr.)
3. Paid rent by cheque Rs.3,000/-
5. Cash received on account of cash sales Rs.3,000/-
Cash Discount Rs.300/-
7. Payment for Cash Purchases Rs.1,000/-
Cash Discount Rs.100/-
9. Cash Payment for salaries Rs.5,000/-
12. Received cheque from Mr. X in final settlement and deposited the same
in Bank Rs.7,700/-
15. Received cash from Mr. Y Rs.4,000/-
Discount Allowed Rs.500/-
17. Cheque received from Z Rs.2,000/-
22. Withdrawn from bank for personal use Rs.1,000/-
24. Cheque received from Z deposited in Bank.
27. Cheque from Z dishonored and returned by Bank
30. Payment of telephone bill by Cheque (including Rs.500/- for residential
connection) Rs.2,000/-
PETTY CASH BOOK
Petty Cash Book is the book which is used for
the purpose of recording the payment of petty
cash expenses.
Petty Cashier is the person who is authorized
to make payments of petty cash expenses and
to record them in petty cash book.
The petty cash book may or may not be
maintained on ‘Imprest System’.
Imprest System
The chief cashier estimates the total petty cash expenses for
a particular fixed period.
The chief cashier advances the estimated amount to the
petty cashier in the beginning of the period.
The Petty Cashier submits the petty cash book along with
supporting vouchers to the chief cashier at the end of the
period.
The Chief Cashier examines the Cash Book
The Chief Cashier reimburses the amount spent by the Petty
Cashier.
The Petty Cashier again has the same amount of petty cash
in the beginning of new period.
 Format of Petty Cash Book

Petty Cash Book

Receipts Payments
Date Particul Cash Total Date Particu Vouc Postage Conveya Staff Cartage Printing Miscell Total
ars Book (Rs.) lars her Telegra nce Welfare & aneous
Folio No m Travellin Station
Rs. g ery Rs.
Rs. Rs.
Rs. Rs. Rs.
 Illustration 6: From the following particulars, prepare Petty Cash Book
on imprest system of Shri Lakshman & Co. for the month of Jan., 2006
Date Particulars Rs.
Jan. 1 Opening Balance on Imprest System
2 Paid for stamps
3 Paid cleaner charges
4 Paid for fare
5 Paid for office tea etc.
6 Paid for repairs of cycle
7 Paid for advertisement
8 Drew imprest from head cashier
9
10
11
12
13
14
15
16
JOURNAL PROPER
Journal Proper is a residuary book in which
those transactions are recorded which cannot be
recorded in any other subsidiary book.
For example: Opening Entries; Closing Entries;
Transfer Entries; Adjusting Entries; Rectifying
Entries and Miscellaneous Entries.
Illustration 7:
Purchased on credit from Bansal & Co. 2
printers @ Rs.4,500/-
Returned one printer, being defective, to
Bansal & Co. @ Rs.4,500/-
Sold on credit two old printers to Murli @
Rs.750/-
Rent due to landlord Rs.2,000/-
Salaries due to employee Shyam
Rs.1,000/-