As we know, the journal is divided into eight subsidiary books. They are.
1. Purchases books
This books records all credit purchase of goods. Cash purchases and purchase of assets are not recorded in this book.
2. Sales books
The goods sold on credit are recorded in this book. Cash sales and assets sold for cash or credit are not recorded in this books
3. Purchase returns books
This book also known as returns outward book. This book records the goods returned to the suppliers
4. Sales return book
It is also known as returns inward book. In this book all the goods returned by the customers are recorded. It records the returns of goods sold on credit only.
5. Cash book
The cash book is meant to record all cash transaction. In other words cash receipts and cash payments either in cash or by cheque are recorded in this book.
6. Bills Receivables books
In thus book all the bills received from customers for the amount due for the goods sold on credit are recorded. It contains the details of acceptor of the bills, its due date, date of bill the amount due etc.
7. Bills payable book
If the goods are purchased for credit or loans are taken. The bills are accepted by the trader. All these bills payable are recorded in this book. It contains, amount due date of the bill, place of payment, due date etc.
8. Journal proper
This book is used for recording only those transaction which can not be recorded in any one of the seven subsidiary books mentioned above. Now let us discuss each of these subsidiary books.
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