Question

Explain the need for drawing up the special purpose books.

Answer 1

Special purpose books are beneficial in:

• Accuracy: As each journal is managed by a different accountant having specific expertise, it improves accuracy and reduces defects.
• Efficiency: Increases efficiency by dividing workload
• Concise Descriptions: The journal describes the purpose of recording. For example a record in the purchase journal, will be understood by default that it is a purchase related transaction.
• Minimal Posting: Reduces the volume of posting as totals can be done periodically.
• Fraud Prevention: As recording of different journals are assigned to different individual, fraud prevention is prevented.
• Faster process: As multiple books are handled by multiple accountants, the recording work moves faster.