Subsidiary Books & Control Accounts

Introduction

As businesses grow, recording every transaction directly in the main books becomes difficult and time-consuming. Accounting uses Subsidiary Books and Control Accounts to improve accuracy, reduce errors, save time, and strengthen internal control.

Examples of high-volume transactions include:

• 100 credit sales daily
• 50 credit purchases daily
• Multiple cash receipts and payments

In TallyPrime, subsidiary books are maintained automatically through vouchers, while control accounts are generated through ledger grouping and reporting.

What Are Subsidiary Books?

Subsidiary Books are specialized accounting books used to record similar types of transactions separately before posting them to the ledger.

Example

• Credit Sales → Sales Book
• Credit Purchases → Purchase Book
• Cash Receipts → Cash Book
• Returns → Return Books

Why Are Subsidiary Books Used?

1. Saves Time – Different employees can maintain different books.
2. Reduces Errors – Transactions are grouped logically.
3. Better Internal Control – Responsibilities are divided among staff.
4. Faster Ledger Posting – Totals can be transferred periodically.
5. Easy Reporting – Quick access to sales, purchases, and returns.

Types of Subsidiary Books

• Purchase Book
• Sales Book
• Purchase Return Book
• Sales Return Book
• Cash Book
• Bills Receivable Book
• Bills Payable Book
• Journal Proper

1. Purchase Book

Records all credit purchases of goods.

Important

Only credit purchases of trading goods are entered.

Not recorded:

• Cash purchases
• Asset purchases

Real-Life Example

Accounting Entry

Purchase A/c Dr ₹50,000
To XYZ Suppliers ₹50,000

TallyPrime Entry

Gateway of Tally → Vouchers → Purchase Voucher (F9)

2. Sales Book

Records all credit sales of goods.

Real-Life Example

Accounting Entry

Raj Stores A/c Dr ₹30,000
To Sales A/c ₹30,000

3. Purchase Return Book

Records goods returned to suppliers. Also called Returns Outward Book.

Accounting Entry

XYZ Suppliers A/c Dr ₹5,000
To Purchase Return A/c ₹5,000

Voucher Used: Debit Note (Ctrl+F9)

4. Sales Return Book

Records goods returned by customers. Also called Returns Inward Book.

Accounting Entry

Sales Return A/c Dr ₹2,000
To Raj Stores A/c ₹2,000

Voucher Used: Credit Note (Ctrl+F8)

5. Cash Book

Records all cash and bank transactions and acts as both a journal and ledger.

TallyPrime Vouchers

• Receipt Voucher (F6)
• Payment Voucher (F5)
• Contra Voucher (F4)

Example

Bank A/c Dr ₹50,000
To Cash A/c ₹50,000

6. Bills Receivable Book

Records bills accepted by customers for future payment.

Use Cases

• Wholesale Trade
• Manufacturing
• Export Businesses

7. Bills Payable Book

Records bills accepted by the business for future payment.

8. Journal Proper

Records transactions not entered in any other subsidiary book.

Examples

• Depreciation Entries
• Outstanding Expenses
• Rectification Entries
• Adjustment Entries

Practical Workflow of Subsidiary Books in TallyPrime

• Sales Department: Sales Voucher
• Purchase Department: Purchase Voucher
• Cashier: Receipt, Payment and Contra Vouchers
• Accounts Department: Journal Voucher, Debit Note and Credit Note

What Are Control Accounts?

A Control Account is a summary account maintained in the General Ledger that shows the total balance of many individual accounts.

Why Control Accounts Are Needed

Businesses may have hundreds of customers and suppliers. Control accounts provide summarized information for quick decision-making.

Types of Control Accounts

• Debtors Control Account
• Creditors Control Account
• Inventory Control Account
• Fixed Asset Control Account

Debtors Control Account

Summarizes all customer balances.

Total Debtors Control Balance = ₹45,000

Creditors Control Account

Summarizes supplier balances.

Total Creditors Control Balance = ₹75,000

Inventory Control Account

Tracks total stock value.

Total Stock Value = ₹1,75,000

Control Accounts in TallyPrime

• Sundry Debtors Group
• Sundry Creditors Group
• Stock Summary
• Group Summary Reports

Real-World Business Case Study

ABC Electronics

• Credit Purchases: ₹15,00,000
• Credit Sales: ₹22,00,000
• Customer Returns: ₹50,000
• Supplier Returns: ₹25,000
• Cash Collections: ₹18,00,000

Management reviews:

• Debtors Control: ₹4,00,000 Outstanding
• Creditors Control: ₹3,50,000 Outstanding
• Inventory Control: ₹12,00,000 Stock

Best Practices for Subsidiary Books in TallyPrime

• Create customers under Sundry Debtors.
• Create suppliers under Sundry Creditors.
• Record transactions daily.
• Use correct voucher types.
• Reconcile debtors, creditors, bank accounts, and inventory monthly.
• Review outstanding reports regularly.

Voucher Reference

Common Mistakes Students Make

• Recording asset purchases in the Purchase Book.
• Recording cash sales in the Sales Book concept.
• Ignoring Debit Notes and Credit Notes.
• Not checking debtor and creditor balances.

Interview Questions

What are Subsidiary Books?

Books maintained to record similar transactions separately before posting to ledger accounts.

Why are Subsidiary Books maintained?

To save time, reduce errors, improve control, and simplify accounting.

What is a Control Account?

A summary account showing the total of several individual ledger accounts.

What is a Debtors Control Account?

An account that summarizes all customer balances.

What is a Creditors Control Account?

An account that summarizes all supplier balances.

Which voucher records Sales Returns in TallyPrime?

Credit Note Voucher (Ctrl + F8).

Which voucher records Purchase Returns?

Debit Note Voucher (Ctrl + F9).

Summary

Subsidiary Books divide accounting work into specialized books such as Purchase Book, Sales Book, Return Books, Cash Book, Bills Books, and Journal Proper. They improve efficiency, accuracy, and internal control.

Control Accounts provide summarized balances of customers, suppliers, inventory, and other groups, enabling management to monitor business performance quickly.

In TallyPrime, these concepts are implemented through voucher entries, ledger groups, inventory management, and reports, helping businesses maintain accurate records and make informed decisions.