Livestock Economics, Marketing and Business Management

ADVANTAGES OF SUBSIDIARY BOOKS

•  Time is saved by reducing the number of total postings to be made, apart from the efforts involved in making elaborate and individual posting and individual journal entries for every time.
• The possibility of mistakes arising from the quantitative aspects of postings is minimized.
• It makes easy to extract the information with regards to specific items such as credit purchases, returns inwards, etc.
• Apart from simplifying the process of postings, retains the major benefits of DES such as the possibility of preparing a Trial Balance as a sort of prime facie check on the accuracy of postings.

Procedure for recording Transaction

• Usual procedure is to record the transaction as and when they arise in the appropriate subsidiary books and credit or debit the personal accounts at once according as they give or receive the goods in each case.
• Periodically, these subsidiary books are totaled and the totals carried to the concerned General Ledger Accounts and posted on the side opposite to that in which postings has been made in the Personal Accounts.
• Thus the total credit purchases will be debited to the Purchases Account, Sales credited to the Sales Account and Purchases returns and sales returns appropriately credited and debited respectively to the accounts in terms of their periodical totals.