We studied about journal and ledger. All business transactions are first entered in the journal and later they are posted in the ledger. It is possible and easy to record each and every transaction in the journal, when the size of the business is small. But it becomes difficult to record numerous transactions in the journal for the large scale oraganizations. Which results in wastage of time, labor and stationary. So in big business organization, where the number of transaction are large, the journal is subdivided in such a way that a separate books is used for each category of transactions which are repetitive in nature and sufficiently large in number. These separate books or special books are known as SUBSIDIARY books. SUBSIDIARY journal or day books.
Advantages of subsidiary books
1. No need of writing the journal entries. Transactions are entered directly into their respective journal.
2. Ledger accounts can be prepared on the basis of subsidiary books.
3. Recording of transaction is fast and easy.
4. These books help in the checking of ledger postings. If the trial balance does not agree the errors can be easily detected by verifying the subsidiary books.
5. Division of work can be implemented by entrusting different subsidiary books to different persons which improved efficiency of recording. Accounting work will be done efficiently
6. Posting of total amount in several ledger accounts instead of writing them separately.
7. Labor involved and time can be saved.
8. Information relating to similar type of transaction will be available at one place. Eg relating to sales or purchase, cash, bank etc.
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