Project I: Prepare subsidiary books MCQs Quiz | Class 9
Test your knowledge for Class IX Elements of Book-Keeping & Accountancy (Code 254), Unit: Project Work. This quiz covers key concepts including creating a sample cash book, purchase book, sales book, returns books, and journal proper. Attempt all questions, submit your answers, and download the PDF answer sheet at the end.
Understanding Subsidiary Books
Subsidiary books, also known as Books of Original Entry or Day Books, are used to record transactions of a similar nature in a chronological order. They are a subdivision of the Journal. Using subsidiary books saves time, allows for division of work, and makes it easier to locate specific transactions. For businesses with a large number of transactions, maintaining only a Journal and Ledger can be cumbersome. Subsidiary books streamline this process.
Key Subsidiary Books and Their Purpose
1. Cash Book
The Cash Book is a special journal which is used for recording all cash receipts and cash payments. It functions as both a book of original entry (a journal) and a book of final entry (a ledger). All cash transactions are directly recorded in the Cash Book and then posted to the respective ledger accounts.
- Single Column Cash Book: Records only cash transactions.
- Double Column Cash Book: Has two amount columns for cash and discount.
- Triple Column Cash Book: Has three amount columns for cash, bank, and discount.
2. Purchase Book (or Purchase Day Book)
The Purchase Book is used to record all credit purchases of goods. Goods refer to the items that the business deals in. Cash purchases of goods or purchases of assets on credit are not recorded in this book. The source document for recording entries in the Purchase Book is the purchase invoice received from the supplier.
3. Sales Book (or Sales Day Book)
The Sales Book is used to record all credit sales of goods. Cash sales of goods or the sale of assets on credit are not recorded here. Entries are made from the sales invoices that the business sends to its customers.
4. Purchase Returns Book (or Returns Outward Book)
This book is used to record goods returned to suppliers. These are goods that were originally purchased on credit. When goods are returned, a Debit Note is prepared and sent to the supplier to inform them that their account has been debited for the value of the returned goods.
5. Sales Returns Book (or Returns Inward Book)
This book records goods returned by customers. These are goods that were originally sold on credit. When a customer returns goods, a Credit Note is sent to them, indicating that their account has been credited for the value of the goods returned.
6. Journal Proper
The Journal Proper is used to record transactions that cannot be recorded in any of the other subsidiary books. It’s a general journal for entries like opening entries, closing entries, rectification entries, transfer entries, and credit purchase/sale of assets.
Summary of Subsidiary Books
| Subsidiary Book | Purpose | Source Document |
|---|---|---|
| Cash Book | To record all cash and bank transactions. | Cash Memos, Vouchers, Cheques |
| Purchase Book | To record credit purchases of goods. | Purchase Invoice (Inward) |
| Sales Book | To record credit sales of goods. | Sales Invoice (Outward) |
| Purchase Returns Book | To record goods returned to suppliers. | Debit Note |
| Sales Returns Book | To record goods returned by customers. | Credit Note |
| Journal Proper | To record residual transactions. | Journal Voucher, etc. |
Quick Revision Points
- Subsidiary books are subdivisions of the Journal.
- Only credit transactions of goods are recorded in Purchase and Sales Books.
- Cash transactions go to the Cash Book.
- Purchase/sale of assets on credit goes to the Journal Proper.
- Debit Note is for purchase returns (returns outward).
- Credit Note is for sales returns (returns inward).
Practice Questions
- What entry would be made for the purchase of machinery on credit?
- If a business sells its old furniture for cash, in which book will it be recorded?
- What is the main purpose of preparing a trial balance after posting from subsidiary books?
- A customer, Rohan, to whom goods were sold on credit for Rs. 5,000, returns goods worth Rs. 500. Which document will be issued to him?
- Why is a Cash Book considered both a journal and a ledger?
