Question

Select the most appropriate alternatives from those given below :

Sub-division of journal is known as ________ book.
a) subsidiary
b) purchase returns
c) purchase
d) journal proper

Answer 1

Sub division of journal is known as subsidiary book.

Explanation:
When the size of a business grows and the number of transactions becomes very large, it is not possible to record all the transactions in the Journal only. So, in order to save time and effort, the Journal is sub-divided into subsidiary books. These books are also called Special Purpose Books or Special Journals or Books of Original/ Prime Entry.
Purchases Book, Purchases Return Book and Journal Proper are the types of subsidiary books that record the transactions of similar nature.