Subsidiary Books

Welcome to today’s class!!

We are thrilled to have you in our class!!

In today’s Store Management class, we will be learning about Subsidiary Books 

Subsidiary Books – Purchase Day Book 

subsidiary books

In Accounting,  we get to understand that there are two types of accounts – accounts of primary entry and accounts of secondary entry. There are some specialized books of primary entry known as subsidiary books. One of the important subsidiary books is the purchase journal or the purchase day book. Let us take a detailed look.

Purchase Day Book is also known as purchase journal, purchase book, invoice book, bought book and so on. It is a type of subsidiary book. It is also a book of original entries.

The purpose of the Purchase Day Book is to record all the credit purchases of the business that are meant for resale.

This means that it does not record any cash purchase transactions. Such transactions will be recorded in the cash book.

Also, any purchases not meant for the purpose of resale are not recorded in the purchase book. For example, a machine bought on credit will not be recorded in the purchase book, but the journal.

After recording all the credit purchase transactions, the book is totaled at the end of the month or week. This aggregate amount shows the total amount of credit purchases for the period.

This amount is debited to the purchase account. And the suppliers of the goods are credited with their individual amounts. That is, money owed to them.

The format of the purchase day book is slightly different from the normal journal. There are five columns in total in a usual purchase book.

The first column is usually the date. Then it is the particulars column which is usually the supplier’s name. Here you can add the other details such as quantity supplied, the rate of the goods and other details.

The third column is the ledger folio, and the fourth is the invoice number. Both of these details are for reference purposes.

In manual accounting, cross-referencing is very important. The last column is the amount column, where you are expected to record the total amount due to the supplier for that transaction.

Now, let’s look at the Advantages of Purchase Day Book

  • All entries of purchases of goods on credit are recorded in one place. It is easy to reference and browse these entries.
  • Important information about these transactions (like the number of goods or the rate of purchase etc.) are written in the journal
  • There is no need for explanatory narratives or account titles either
  • It enables the division of labor among the business’s employees



What are Subsidiary Books?


Reading Assignment

Explain the function of a Purchase Day Book 


Weekend Assignment

Give five benefits of Purchase Day Book 


We hope you enjoyed today’s class. In our next class, we will be talking about Cash book 

Let us know your thoughts and questions in the comment section, and we will attend to them as fast as we can.

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