To record the business transactions in journal and then post them into ledger. You know that journal is a book of prime entry in which all transactions are to be recorded first. But, in practice, the number of transactions happens to be so large that it becomes difficult to record them in one book. Hence, the journal is sub-divided into a number of special journals, called subsidiary book. In this unit you will learn about the most important subsidiary book called Cash Book. We shall discuss various types of cash books, study how transactions are recorded in the Single Column and Two Column Cash Books, and how they are posted into ledger. 

Need For Sub-division Of Journal:

The system of having only one book of prime entry may work for a small organization where the number of transactions is usually small. But, when the number of transactions is large, it is practically impossible to record all the transactions through one journal. It is because:

i.The journal can be handled by only one person and the work becomes too, heavy for him,

ii.The transactions may not Be recorded promptly, as all transactions have to be recorded in the same book; and

iii.The journal becomes bulky and voluminous.