Subsidiary books explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
In a business with many transactions of the same kind, entering each one separately in a single journal is slow and error-prone. Subsidiary books split the journal by type of transaction: credit purchases, credit sales, returns and the rest. Each is written up in date order and posted to the ledger, mostly in total. Our bookkeeping and online accounting team uses these books for clients with daily invoicing.
The purchases book records goods bought on credit for resale, the sales book goods sold on credit, the purchase returns book and sales returns book goods sent back, and the journal proper everything else that fits none of them. Cash and bank transactions go to the cash book. Each book is posted in total to the debit or credit of the main account and individually to the party's account, so that the ledger keeps both views.
Which book for which transaction
| Book | What goes in | Source document | Posted to |
|---|---|---|---|
| Purchases book | Credit purchases of goods meant for resale | Supplier's invoice | Total: debit Purchases. Each line: credit the supplier |
| Sales book | Credit sales of goods | Copy of our invoice | Total: credit Sales. Each line: debit the customer |
| Purchase returns book | Goods returned to a supplier | Debit note | Total: credit Purchase Returns. Each line: debit the supplier |
| Sales returns book | Goods returned by a customer | Credit note | Total: debit Sales Returns. Each line: credit the customer |
| Journal proper | Opening entries, closing entries, adjustments, rectifications, credit purchase of an asset, bad debts written off | Voucher or memo | Debit and credit accounts as the entry says |
| Cash book | All cash and bank receipts and payments | Receipts, vouchers | See the cash book article |
Cash purchases and cash sales are not in the purchases or sales book; they go to the cash book. A credit purchase of furniture or a computer is not in the purchases book either, because it is not goods for resale; it goes through the journal proper. See the cash book guide for the book that takes the rest.
How a book is written up
- Enter each invoice or note in date order with the party's name.
- Show the amount net of trade discount, which is a reduction from list price at the time of sale and is not recorded as a separate account.
- Carry the page total forward and keep a running total for the period.
- At the end of the period, total the amount column.
- Post each line to the party's account in the ledger and the total to the main account.
Cash discount is different: it depends on prompt payment, is allowed or received at the time of payment and is recorded in the cash book. GST is ignored in this example. See accounting entries under GST for how tax columns are added to each book; no tax rate is used here.
Worked example: a fortnight of Joshi Wholesale Traders
The entity and all figures in this example are invented for illustration.
Joshi Wholesale Traders trades in cloth. Its transactions on credit from 1 to 15 May 2026 are shown in each book.
Purchases book
| Date | Supplier | Particulars | Amount |
|---|---|---|---|
| 2 May | Arora Mills | List price 50,000 less trade discount 5,000 | 45,000 |
| 6 May | Bansal Agencies | Goods as per invoice | 32,000 |
| 11 May | Chopra Fabrics | Goods as per invoice | 28,000 |
| Total (to Purchases A/c, debit) | 1,05,000 |
Sales book
| Date | Customer | Amount |
|---|---|---|
| 3 May | Dubey Stores | 36,000 |
| 7 May | Eshan Retail | 24,000 |
| 9 May | Farooq and Sons | 40,000 |
| 13 May | Dubey Stores | 20,000 |
| Total (to Sales A/c, credit) | 1,20,000 |
Purchase returns book
| Date | Supplier | Debit note | Amount |
|---|---|---|---|
| 8 May | Bansal Agencies | Damaged pieces | 2,000 |
| 12 May | Chopra Fabrics | Wrong shade | 3,000 |
| Total (to Purchase Returns A/c, credit) | 5,000 |
Sales returns book
| Date | Customer | Credit note | Amount |
|---|---|---|---|
| 10 May | Eshan Retail | Short length | 4,000 |
| 14 May | Dubey Stores | Wrong colour | 6,000 |
| Total (to Sales Returns A/c, debit) | 10,000 |
Journal proper
| Date | Particulars | Debit | Credit |
|---|---|---|---|
| 15 May | Computers A/c Dr | 30,000 | |
| To Zenith Computers | 30,000 | ||
| (Computer bought on credit for the office) | |||
| 15 May | Bad debts A/c Dr | 1,500 | |
| To Farooq and Sons | 1,500 | ||
| (Part of the balance written off as irrecoverable) | |||
| Total | 31,500 | 31,500 |
Posting in total and by party. The ledger now shows these balances.
| Account | Posted from | Debit | Credit |
|---|---|---|---|
| Purchases | Purchases book (total) | 1,05,000 | |
| Sales | Sales book (total) | 1,20,000 | |
| Purchase returns | Purchase returns book (total) | 5,000 | |
| Sales returns | Sales returns book (total) | 10,000 | |
| Computers | Journal proper | 30,000 | |
| Bad debts | Journal proper | 1,500 |
| Supplier | Credit from purchases | Debit for returns | Credit from journal | Balance (credit) |
|---|---|---|---|---|
| Arora Mills | 45,000 | 45,000 | ||
| Bansal Agencies | 32,000 | 2,000 | 30,000 | |
| Chopra Fabrics | 28,000 | 3,000 | 25,000 | |
| Zenith Computers | 30,000 | 30,000 | ||
| Total creditors | 1,30,000 |
| Customer | Debit from sales | Credit for returns | Credit from journal | Balance (debit) |
|---|---|---|---|---|
| Dubey Stores (36,000 + 20,000) | 56,000 | 6,000 | 50,000 | |
| Eshan Retail | 24,000 | 4,000 | 20,000 | |
| Farooq and Sons | 40,000 | 1,500 | 38,500 | |
| Total debtors | 1,08,500 |
Check. Creditors: purchases 1,05,000 - returns 5,000 + computer 30,000 = 1,30,000, equal to 45,000 + 30,000 + 25,000 + 30,000. Debtors: sales 1,20,000 - returns 10,000 - bad debt 1,500 = 1,08,500, equal to 50,000 + 20,000 + 38,500. Total posted both ways: 1,05,000 + 1,20,000 + 5,000 + 10,000 + 31,500 = 2,71,500 on the debit side and on the credit side.
The totals posted to the accounts must match the sum of the party balances; this is why a ledger of debtors or creditors can be checked against a control account. See the ledger article for how the balances are carried down.
Common mistakes
- Entering an asset purchase in the purchases book: the Purchases account then includes a fixed asset and profit is understated.
- Recording gross value: the invoice should be entered net of trade discount.
- Posting only the total: the party accounts will not show what each person owes.
- Missing credit notes: the customer's balance stays overstated.
- Entering cash sales in the sales book: they belong in the cash book.
Need help with books of original entry?
If invoices are posted late or the debtors list does not agree with the ledger, we can set up the subsidiary books and reconcile the party accounts. Our bookkeeping and online accounting service handles invoice entry, returns and month-end control checks.
Key takeaways
- Subsidiary books split the journal by type of transaction.
- Credit purchases of goods for resale go in the purchases book; other credit purchases go through the journal proper.
- Each book is posted in total to the main account and line by line to the party account.
- Returns are recorded on debit and credit notes.
- The journal proper takes openings, adjustments, rectifications and bad debts.
Read next
- Journal entries: rules of debit and credit
- Ledger posting and balancing
- Cash book: single, double and triple column
- Accounting entries under GST
Disclaimer: Based on the Accounting Standards issued by the Institute of Chartered Accountants of India as on 1 April 2025, the Companies (Accounting Standards) Rules, 2021 as amended up to G.S.R. 169(E) of 10 March 2026, the Companies Act, 2013 and the ICAI guidance named in the article, as consulted on 4 October 2026. The worked example uses invented figures. Later amendments should be checked on icai.org and mca.gov.in. This article is general information, not legal advice; check the official text before acting.