Page 47 - DMGT403_ACCOUNTING_FOR_MANAGERS
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Accounting for Managers
Notes 3.1 Classification of Subsidary Books
The following are the subsidiary books on the major frequent occurrence of transactions.
Figure 3.1
Subsidiary
Books
Cash Non-Cash
Transaction Transaction
Cash Purchases Sales Purchase Bills Bills
Sales Returns Returns Receivable Payable
Book Book Book
Book
Book Book Book
Subsidiary books are classified on the basis of transactions viz Cash transactions and Non-cash-
transactions.
Did u know? What is meant by the Non-cash transaction?
A Non-cash transaction is a transaction in terms of credit and conditions of the enterprise.
The Non-cash transactions shall include the following transactions of the enterprise, which
do not involve any cash; they are as follows:
1. Credit sales Book
2. Credit purchases Book
3. Credit Sales Return Book
4. Credit Purchases Return Book
5. Bills Payable Book- Outcome of Credit transaction, and
6. Bill Receivable Book - Outcome of Credit transaction
3.2 Cash Book
Cash book is the book of accounts where most of the transactions are generally related with the
receipts and payment of cash. It may be either purchase of goods for cash or sale of goods for
cash or it may be either payment of expenses or receipts of income. All such transactions are
recorded separately in a book, which is known as the cash book. This book is helpful in telling
the accurate balance of cash in hand or at bank. All cash transactions are directly entered into the
cash book and on the basis of cash book, ledger accounts are prepared.
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