AccountancyUnit 710 min read

Subsidiary Books: Types, Uses & Recording

Unit 7 of Accountancy explains subsidiary books (journals for specific transactions), their types (cash book, sales day book, purchase day book, etc.), how to record entries, and why they simplify accounting work.

Padhai · Based on the official syllabus and past papers
Updated 28 Sept 2026

TAKEAWAYS:

Subsidiary books are special journals for repetitive transactions, reducing workload in the general ledger.
The five main types are Cash Book, Sales Day Book, Purchase Day Book, Purchase Returns Day Book, and Sales Returns Day Book.
Each subsidiary book has a unique format (e.g., Sales Day Book has columns for date, invoice no., customer, amount, and total).
They help detect errors early by summarizing transactions before posting to the ledger.
Cash Book is the most important subsidiary book, recording both cash and bank transactions.
NEB exams test definitions, formats, and journal entries from subsidiary books.

What Are Subsidiary Books?

Subsidiary books are special journals used to record similar types of transactions separately. They help in simplifying the work of the general ledger by grouping repetitive entries.

Why Use Subsidiary Books?

Save time (no need to write the same details repeatedly).
Reduce errors (less manual work).
Help in quick reference (e.g., checking sales to a specific customer).
Make auditing easier (transactions are organized).

Example: Instead of writing every sale in the general journal, we record all sales in the Sales Day Book.

Types of Subsidiary Books

There are five main subsidiary books in accounting:

Subsidiary Book	Purpose	Columns Used
Cash Book	Records all cash and bank transactions.	Date, Particulars, L.F., Cash Column, Bank Column, Balance Column
Sales Day Book (SD)	Records credit sales (sales on account).	Date, Invoice No., Customer, Amount, Total
Purchase Day Book (PD)	Records credit purchases (buying goods on account).	Date, Invoice No., Supplier, Amount, Total
Sales Returns Day Book	Records goods returned by customers (sales returns).	Date, Invoice No., Customer, Amount, Total
Purchase Returns Day Book	Records goods returned to suppliers (purchase returns).	Date, Invoice No., Supplier, Amount, Total

1. Cash Book

The Cash Book is the most important subsidiary book. It records all cash and bank transactions in one place.

Example of a double-column Cash Book with debit and credit sides

Types of Cash Books

Single Column Cash Book – Only cash transactions.
Double Column Cash Book – Cash and bank transactions in two columns.
Triple Column Cash Book – Cash, bank, and discount columns.

Format of a Double Column Cash Book

  Date   Particulars       L.F.   Cash (₹)   Bank (₹)   Balance (₹)
  2080/04/01   To Opening Balance   ...   50,000   30,000   80,000
  2080/04/02   By Sales   SDB/1   ...   10,000           90,000
  2080/04/03   To Purchase   PDB/2   ...           5,000   85,000

(L.F. = Ledger Folio, where the transaction is posted later.)

Example: Recording in Cash Book

Transaction:

Received ₹10,000 from Ram for sales.
Paid ₹5,000 to Shyam for purchases.

Entry in Cash Book:

  Date       Particulars       L.F.   Cash (₹)   Bank (₹)   Balance (₹)
  2080/04/01   To Opening Balance   ...   50,000   30,000   80,000
  2080/04/02   By Ram (Sales)   SDB/1   ...   10,000           90,000
  2080/04/03   To Shyam (Purchase)   PDB/2   ...           5,000   85,000

2. Sales Day Book (SD)

Records credit sales (sales on account, not cash).

Format of Sales Day Book

  Date   Invoice No.   Customer   Amount (₹)   Total (₹)
  2080/04/01   INV-001   Ram       5,000       5,000
  2080/04/02   INV-002   Shyam     7,000       12,000

(Total is a running total of all sales.)

Example: Recording in Sales Day Book

Transaction:

Sold goods to Ram on credit for ₹5,000 (Invoice No. INV-001).
Sold goods to Shyam on credit for ₹7,000 (Invoice No. INV-002).

Entry in Sales Day Book:

  Date       Invoice No.   Customer   Amount (₹)   Total (₹)
  2080/04/01   INV-001     Ram         5,000       5,000
  2080/04/02   INV-002     Shyam       7,000       12,000

Posting to Ledger:

Ram’s Account (Debit Side): ₹5,000
Sales Account (Credit Side): ₹5,000
Shyam’s Account (Debit Side): ₹7,000
Sales Account (Credit Side): ₹7,000

3. Purchase Day Book (PD)

Records credit purchases (buying goods on account).

Format of Purchase Day Book

  Date   Invoice No.   Supplier   Amount (₹)   Total (₹)
  2080/04/01   INV-101   ABC Ltd.   3,000       3,000
  2080/04/02   INV-102   XYZ Co.    4,000       7,000

Example: Recording in Purchase Day Book

Transaction:

Bought goods from ABC Ltd. on credit for ₹3,000 (Invoice No. INV-101).
Bought goods from XYZ Co. on credit for ₹4,000 (Invoice No. INV-102).

Entry in Purchase Day Book:

  Date       Invoice No.   Supplier   Amount (₹)   Total (₹)
  2080/04/01   INV-101     ABC Ltd.   3,000       3,000
  2080/04/02   INV-102     XYZ Co.    4,000       7,000

Posting to Ledger:

ABC Ltd.’s Account (Credit Side): ₹3,000
Purchase Account (Debit Side): ₹3,000
XYZ Co.’s Account (Credit Side): ₹4,000
Purchase Account (Debit Side): ₹4,000

4. Sales Returns Day Book

Records goods returned by customers (sales returns).

Format of Sales Returns Day Book

  Date   Invoice No.   Customer   Amount (₹)   Total (₹)
  2080/04/03   INV-001   Ram       1,000       1,000

Example: Recording in Sales Returns Day Book

Transaction:

Ram returned goods worth ₹1,000 (Invoice No. INV-001).

Entry in Sales Returns Day Book:

  Date       Invoice No.   Customer   Amount (₹)   Total (₹)
  2080/04/03   INV-001     Ram         1,000       1,000

Posting to Ledger:

Ram’s Account (Credit Side): ₹1,000 (since he returned goods)
Sales Returns Account (Debit Side): ₹1,000

5. Purchase Returns Day Book

Records goods returned to suppliers (purchase returns).

Format of Purchase Returns Day Book

  Date   Invoice No.   Supplier   Amount (₹)   Total (₹)
  2080/04/04   INV-101   ABC Ltd.   500         500

Example: Recording in Purchase Returns Day Book

Transaction:

Returned goods worth ₹500 to ABC Ltd. (Invoice No. INV-101).

Entry in Purchase Returns Day Book:

  Date       Invoice No.   Supplier   Amount (₹)   Total (₹)
  2080/04/04   INV-101     ABC Ltd.   500         500

Posting to Ledger:

ABC Ltd.’s Account (Debit Side): ₹500 (since we returned goods)
Purchase Returns Account (Credit Side): ₹500

How Subsidiary Books Connect to the Ledger

Subsidiary books summarize transactions before posting to the general ledger.

Step-by-step connection between Subsidiary Books and Ledger

Process of Posting:

Record in Subsidiary Book (e.g., Sales Day Book).
Total the subsidiary book at the end of the month.
Post the total to the ledger (e.g., Sales Account).
Post individual entries to customer/supplier accounts.

Example:

Sales Day Book total = ₹12,000
- Sales Account (Credit Side): ₹12,000
- Ram’s Account (Debit Side): ₹5,000
- Shyam’s Account (Debit Side): ₹7,000

Posting the total of Sales Day Book to Sales Account

Advantages of Subsidiary Books

✅ Saves Time – No need to write the same details repeatedly. ✅ Reduces Errors – Less manual work means fewer mistakes. ✅ Helps in Detection of Errors – Discrepancies can be found early. ✅ Easier Auditing – Transactions are organized and easy to verify. ✅ Quick Reference – Helps in checking specific transactions (e.g., sales to a customer).

Disadvantages of Subsidiary Books

❌ Extra Work Initially – Setting up subsidiary books takes time. ❌ Not Suitable for Small Businesses – Too complex for very small firms. ❌ Requires Training – Employees must be trained to use them properly.

NEB Board-Style Questions (Practice)

Short Answer Questions

Define Subsidiary Books. (2 marks)

Subsidiary books are special journals used to record similar types of transactions separately to simplify accounting work.
Name the five main subsidiary books. (2 marks)

Cash Book, Sales Day Book, Purchase Day Book, Sales Returns Day Book, Purchase Returns Day Book.
What is the purpose of a Sales Day Book? (2 marks)

It records credit sales (sales on account) to keep track of sales made to customers.

Practical Questions

Prepare a Sales Day Book from the following transactions:
- Sold goods to Ram for ₹5,000 (Invoice No. INV-001).
- Sold goods to Shyam for ₹7,000 (Invoice No. INV-002). (3 marks)
Answer:
```
Date       Invoice No.   Customer   Amount (₹)   Total (₹)
2080/04/01   INV-001     Ram         5,000       5,000
2080/04/02   INV-002     Shyam       7,000       12,000
```

Record the following transactions in a Double Column Cash Book:

Received ₹10,000 from Ram.
Paid ₹5,000 to Shyam.
Deposited ₹3,000 in the bank. (5 marks)

Answer:

Date       Particulars       L.F.   Cash (₹)   Bank (₹)   Balance (₹)
2080/04/01   To Opening Balance   ...   50,000   30,000   80,000
2080/04/02   By Ram (Sales)   SDB/1   ...   10,000           90,000
2080/04/03   To Shyam (Purchase)   PDB/2   ...           5,000   85,000
2080/04/04   To Bank   ...   ...   3,000   82,000

Exam Tip

✔ Memorize the formats of all subsidiary books (especially Cash Book, Sales Day Book, and Purchase Day Book). ✔ Practice recording transactions in subsidiary books before posting to the ledger. ✔ Understand the difference between Sales Day Book and Sales Returns Day Book. ✔ NEB often asks for:

Definitions of subsidiary books.
Formats of subsidiary books.
Journal entries from subsidiary books.
Posting totals to the ledger. ✔ Always show working in practical questions (e.g., totals, postings).

Good luck with your NEB exam preparation! 🚀

Based on the NEB +2 Management syllabus for Accountancy (Acc), unit 7.

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