Subsidiary Books: Concept and importance MCQs Quiz | Class 9
Test your knowledge with this MCQ quiz for Class IX, focusing on the subject Elements of Book-Keeping & Accountancy (Code 254). This quiz is from Unit 4: Journal and covers the topic of Subsidiary Books, including their concept, importance, the division of journal work, efficiency, and internal control. Attempt all questions, submit your answers to see your score, and download the PDF answer sheet for future reference.
Understanding Subsidiary Books
Subsidiary Books are specialized journals used to record a specific type of transaction that occurs frequently and in large numbers. Instead of recording every single transaction in one main journal, businesses divide the journal into several books. This division of the journal is the primary purpose of subsidiary books. They are also known as Books of Original Entry or Day Books because transactions are first recorded in them.
Key Concepts and Importance
1. Division of Journal Work
The main advantage of using subsidiary books is the division of labor. Instead of one accountant handling all entries, the work can be divided among several clerks. For example, one clerk can handle the Purchases Book, another can handle the Sales Book, and a third can manage the Cash Book. This specialization leads to greater accuracy and speed.
2. Efficiency and Time-Saving
With divided work, multiple transactions can be recorded simultaneously by different people. This significantly speeds up the accounting process, especially in large businesses with a high volume of transactions. It also saves time during posting, as totals from subsidiary books can be posted to the ledger periodically (e.g., weekly or monthly) instead of individual entries.
3. Internal Control
Subsidiary books are a vital tool for internal control. By segregating duties (e.g., the person handling cash is different from the person recording it), the risk of fraud or errors is minimized. It makes auditing easier, as an auditor can check specific books for specific types of transactions. This systematic recording and clear separation of duties create a robust internal check system.
Common Types of Subsidiary Books
Here is a summary of the most common subsidiary books and the types of transactions they record:
| Subsidiary Book | Transactions Recorded |
|---|---|
| Cash Book | All cash and bank transactions (receipts and payments). |
| Purchases Book (or Purchases Journal) | All credit purchases of goods (items the business deals in). |
| Sales Book (or Sales Journal) | All credit sales of goods. |
| Purchases Return Book | Return of goods purchased on credit. |
| Sales Return Book | Return of goods sold on credit. |
| Journal Proper | Transactions that do not fit in any other subsidiary book (e.g., opening entries, closing entries, purchase of assets on credit). |
Quick Revision Points
- Subsidiary books are subdivisions of the Journal.
- They are books of prime or original entry.
- They help in dividing work, leading to specialization and efficiency.
- They are an essential component of a good internal control system.
- Cash purchases/sales of goods are recorded in the Cash Book, not the Purchases/Sales Book.
- The purchase or sale of an asset on credit is recorded in the Journal Proper.
Practice Questions for Revision
- Where would the sale of old office furniture on credit be recorded?
- A business buys goods for cash from Mr. A. In which subsidiary book will this transaction be entered?
- What is the primary purpose of preparing a Sales Return Book?
- Explain why subsidiary books facilitate a system of internal check.
- If a business does not maintain subsidiary books, where are all transactions recorded initially?
