Advantages of Subsidiary Books
Subsidiary Books helps to save time and labor by recording a similar type of transactions in a separate book. These books are books of original entry. It also helps to maintain accounts and thus avoids the necessity of journal entries. In the normal track of business, a majority of transactions are either related to sales, purchases or cash. This is avoided by sub-dividing the journal into a variety of subsidiary journals or books.
The advantages of maintaining subsidiary books can be summarized as under:
- Effectiveness:
The division of labor helps the decrease in workload, saving in time and stationery. It also gives advantages to the area leading to effectiveness. It becomes easy to entrance the comprehensive information relating to an exacting transaction. Thus the accounting work will be done proficiently.
- Division of Labour:
The division of journal, resulting in a division of work, ensures more clerks working independently in recording original entries in the subsidiary books. It increases the efficiency of personnel as they perform the same activities daily. This makes a quick record of day-to-day transactions realistic.
- Division of Work:
In place of one general journal, we have a number of subsidiary books, So the consequential work might be divided among numerous members of the employees. This will save time, improve competence and outcome in fewer errors as well.
Prevents Errors and Frauds: The accounting work can be divided in such a manner that the work of one person is automatically checked by another person. With the use of internal checks, the opportunity of the incidence of errors and frauds may be avoided. These books make probable the prologue of the internal check system under which the structure of rotation of writing up books can be adopted. Even the commission of errors and frauds will be checked by the use of a variety of subsidiary books.
- Saving the time:
Recording in a subsidiary book saves a lot of time and office hours. It helps to save time and labor by recording comparable types of transactions in a detached book. Various accounting processes can be undertaken at the same time because of the use of a number of books. There is no requiring journalizing and/or giving narrations for each transaction. This helps decrease the time it takes to wholly record a transaction. This will guide to the work being finished hastily. This will save the time of the employees and accountants.
- Easy Reference:
It facilitates simple references to any exacting item. For example, total credit sales for a month can be easily obtained from the Sales Book. Whenever any information is required we directly refer the subsidiary book to get said information. As transactions of comparable nature are grouped simultaneously in a separate book, the supplementary reference to any exacting item is considerably facilitated.
- Easy Postings:
Subsidiary books consequence substantial saving of clerical labor in postings and narration. It helps to preserve accounts and thus avoids the requirement of journal entries. Posting from the subsidiary books are made at convenient intervals depending upon the nature of the business.
