1. SUB-DIVISION OF JOURAL:CASHBOOK
CHAPTER – 8
SUB-DIVISION OF JOURAL:CASHBOOK

2. JOURNAL ?
Journal is the book of prime entry. It means all Business transactions are to be first recorded in the journal.
When the number of transactions is large, recording of all transactions in one journal will not only be inconvenient but also cause delay in collecting information required.
Where transactions are numerous and particularly of repetitive and similar nature, It is practicable to divide the main journal in to sub journal or in various subsidiary books

3. Subsidiary books and their types
Generally transactions can be classified into broad groups, namely cash and non-cash
Cash receipts and payments can be grouped in one category where credit purchases in another category
Credit sales is yet another category.
Journal is subdivided in to such a way that a separate book is used for each category of transactions which are repetitive in nature and are sufficiently large in number.
This separate books are popularly known as subsidiary books.

4. Following are the subsidiary books
Cash book: It is used for recording only cash transactions i.e.: Receipts and payments
Purchase book: It records only credit purchases of goods in which trader deals.
Sales book: It means for writing only credit sales of goods dealt in by the trader.
Purchases return book: It meant for recording all returns of goods purchase on credit
Sales return book: It means for recording all returns of goods sold on credit.

5. Following are the subsidiary books
Bills receivable book: It meant for recording all bills of exchange or promissory note received by the business from its debtors.
Bills payable book: It is meant for recording all bills of exchange or promissory notes issued by the business in favour of its creditors.
Journal proper: It meant for recording all such transactions for which no special journal has been kept by the Business.

6. Bill of exchange
A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. A common type of bill of exchange is the cheque defined as a bill of exchange drawn on a banker and payable on demand. Bills of exchange are used primarily in international trade, and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. Prior to the advent of paper currency, bills of exchange were a common means of exchange. They are not used as often today.
It is essentially an order made by one person to another to pay money to a third person.
A bill of exchange requires in its inception three parties—the drawer, the drawee, and the payee.
The person who draws the bill is called the drawer. He gives the order to pay money to the third party. The party upon whom the bill is drawn is called the drawee. He is the person to whom the bill is addressed and who is ordered to pay. He becomes an acceptor when he indicates his willingness to pay the bill. (Sec.62) The party in whose favor the bill is drawn or is payable is called the payee.

7. Advantages of subsidiary book and subdivision of journal
Facilitates division of work
Protection from fraud
Facility in checking business transactions. (sales return purchase return)
Increase in efficiency (interest in particular work)
Less time more work( making entries in subsidiary books is easy, posting takes less time. Thus there is a saving of much time and labour).
Full information at one place
Flexible (necessary to keep all subsidiary book, the number of books may increase or decrease)
Responsibility of the work.

8. Cash Book
Cash book is the special journal which is used for recording all cash transactions. It may be defined as the book in which transactions are recorded in detailed particulars of all money received and paid.
Cash book is divided in to two;
A) Cash receipt
B) Cash payment

9. FEATURES OF CASH BOOK To keep record of only cash transactions
All receipts are recorded in debit side
All payments are recorded in credit side
Chronological (date wise) transaction recording of all transactions.
Performs function of both journal and ledger.

10. Objects or Need of cash book
To find out the total cash receipts and cash payments during a given period.
To ascertain the balance of cash in hand and at bank at any time without actually counting cash and examining Bank passbook
To verify the correctness of cash in hand and bank.

11. IMPORTANTS OF CASH BOOK
This is a very popular book and it is maintained in all organisations.
Big or small ,profit and non trading concerns
It helps the trader to understand the cash in hand and cash at bank.
It is easy to find out any fraudulent activities inside the organisation.