Subsidiary Books and Cash Book: ISC Class 11 Accounts Notes

What Subsidiary Books and Cash Book is about

Weightage: Subsidiary Books and Cash Book belongs to the unit Journal, Ledger and Trial Balance, which CISCE weights at 12 of the 80 marks in the ISC Class XI Accountancy Paper I (Theory). Class XI is examined by the school, so your school sets the paper within this weightage.Source: CISCE ISC Accountancy syllabus, examination year 2028, Class XI unit weightage

Key concepts

Subsidiary books: meaning, types and advantages

Subsidiary books (books of original entry other than the journal) record transactions of a similar nature in one place:

Book	Records
Cash book	All cash and bank receipts and payments
Petty cash book	Small cash payments (postage, conveyance, stationery)
Purchases (day) book	Credit purchases of goods only
Sales (day) book	Credit sales of goods only
Purchases returns (return outwards) book	Goods returned to suppliers (credit purchases)
Sales returns (return inwards) book	Goods returned by customers (credit sales)
Bills receivable / bills payable books	Bills received and accepted
Journal proper	Everything else: opening, closing, adjusting and rectifying entries; credit purchase/sale of assets; bad debts; goods withdrawn; loss by fire; dishonour of cheques

Advantages: division of work among clerks; saving of time in posting (only totals to nominal accounts); specialisation and efficiency; easier detection of errors and fraud (internal check); quick information on, say, total credit sales.

Worked example

In which book is each recorded? (i) Goods sold on credit to Asha; (ii) furniture bought on credit; (iii) goods returned by Asha; (iv) cash sales; (v) bad debt written off. [2 marks]

Try it first, then show the solutionSolution

1. (i) Sales book; (iii) sales returns book; (iv) cash book.
2. (ii) Furniture is an asset, not goods, so journal proper; (v) bad debts: journal proper.

Answer: (i) Sales book; (ii) journal proper; (iii) sales returns book; (iv) cash book; (v) journal proper.

Simple cash book

The cash book is both a book of original entry and a ledger account (the Cash A/c), so no separate Cash A/c is opened in the ledger. The simple (single column) cash book records only cash: receipts on the debit side ('To ...'), payments on the credit side ('By ...').

Format

Date	Receipts	L.F.	₹	Date	Payments	L.F.	₹
	To Balance b/d				By Purchases A/c

• It is balanced like any account; the balance is always debit (cash in hand).
• Credit transactions never enter the cash book.
• Posting: each entry is posted to the opposite side of the account named: 'To Sales A/c 25,000' on the debit side of the cash book is posted as 'By Cash A/c 25,000' on the credit side of Sales A/c.

Worked example

Suppose a simple cash book shows receipts of ₹84,500 (including opening balance) and payments of ₹62,750. Find the closing cash balance and say where it is written. [1 mark]

Try it first, then show the solutionSolution

1. Balance = 84,500 − 62,750 = ₹21,750, written as 'By Balance c/d' on the credit side, and brought down as 'To Balance b/d' on the debit side.

Answer: Closing cash ₹21,750 (debit balance).

Triple column cash book and contra entries

The triple column cash book has Discount, Cash and Bank columns on each side:

• Debit side: Discount (allowed), Cash (received), Bank (deposited/received by cheque).
• Credit side: Discount (received), Cash (paid), Bank (paid by cheque).

Contra entry ('C' in the L.F. column): a transaction between cash and bank, recorded on both sides and not posted to the ledger:

• Cash deposited into bank: Bank column Dr, Cash column Cr.
• Cash withdrawn from bank for office use: Cash column Dr, Bank column Cr.

Cheque received and not deposited the same day: it is first treated as cash (Cash column, debit). When it is deposited later, a contra entry moves it: Bank column Dr, Cash column Cr ('To Cash' / 'By Bank'). A cheque deposited the same day goes straight into the Bank column.

Discount columns are not balanced: the debit discount column total is posted to the debit of Discount Allowed A/c, the credit total to the credit of Discount Received A/c. Cash and bank columns are balanced; bank may show a credit balance (overdraft).

Worked example

Record in a triple column cash book: Jul 3 received a cheque of ₹19,600 from Amit in full settlement of ₹20,000 (not deposited that day); Jul 5 deposited it into the bank. [2 marks]

Try it first, then show the solutionSolution

1. Jul 3, debit side: 'To Amit' Discount 400, Cash 19,600 (cheque treated as cash).
2. Jul 5, contra: debit side 'To Cash (C)' Bank 19,600; credit side 'By Bank (C)' Cash 19,600.

Answer: Discount allowed ₹400 and cash ₹19,600 on Jul 3; contra on Jul 5 moves ₹19,600 from cash to bank.

Definite cash balance and overdraft facility at the period end

Some questions say the business keeps a fixed cash balance (say ₹5,000) at the end of the period and banks the rest, or withdraws from the bank (even into overdraft) to restore the cash balance.

Method:

1. Record all other transactions and total the cash column before the last entry.
2. Excess cash = Cash available − Required balance → deposit: contra 'To Cash' (Bank Dr) / 'By Bank' (Cash Cr).
3. Shortfall = Required balance − Cash available → withdraw from bank: contra 'To Bank' (Cash Dr) / 'By Cash' (Bank Cr). If the bank balance is smaller than the withdrawal, the bank column ends with a credit balance (overdraft), allowed only up to the overdraft limit.
4. Then balance both columns; the cash balance equals the required figure.

Worked example

Suppose before the last entry on 31st July a firm's cash column shows ₹3,200 and its bank column ₹4,500 (Dr). It must hold ₹10,000 in cash and has an overdraft facility. Record the adjustment and the closing balances. [3 marks]

Try it first, then show the solutionSolution

1. Shortfall = 10,000 − 3,200 = ₹6,800: withdraw from bank (contra): Cash Dr 'To Bank (C) 6,800'; Bank Cr 'By Cash (C) 6,800'.
2. Bank = 4,500 − 6,800 = −₹2,300: an overdraft; 'To Balance c/d 2,300' on the debit side of the bank column.
3. Cash balance = 3,200 + 6,800 = ₹10,000.

Answer: Withdraw ₹6,800 (contra); cash ₹10,000 (Dr); bank overdraft ₹2,300 (Cr balance).

Petty cash book: analytical and imprest system

The petty cashier makes small payments from a fixed float so that the main cash book is not crowded with small items.

Imprest system: at the start of the period the head cashier gives the petty cashier a fixed amount (the imprest, say ₹5,000). At the end the petty cashier submits vouchers, and the head cashier reimburses exactly the amount spent, bringing the float back to the imprest.

Analytical petty cash book: the payments side has one column per type of expense (postage, stationery, conveyance, refreshment, sundries) plus a total column, so each expense head is totalled automatically.

Format: Receipts | Date | Particulars | Voucher No. | Total | Postage | Stationery | Conveyance | Refreshment | Sundries | L.F.

Posting: the column totals are debited to the expense accounts (Postage A/c Dr, To Petty Cash A/c); the main cash book shows the reimbursement as 'By Petty Cash A/c'.

Advantages: saves the head cashier's time; control through the fixed imprest and vouchers; expense-wise totals; fewer ledger postings.

Worked example

Suppose a petty cashier receives an imprest of ₹6,000 on 1st September and spends: postage ₹1,240, stationery ₹980, conveyance ₹1,350, refreshment ₹720 and sundries ₹410 during September. Find the total spent, the closing balance, and the reimbursement on 1st October. [2 marks]

Try it first, then show the solutionSolution

1. Total spent = 1,240 + 980 + 1,350 + 720 + 410 = ₹4,700.
2. Balance = 6,000 − 4,700 = ₹1,300; reimbursement = ₹4,700, restoring the float to ₹6,000.

Answer: Spent ₹4,700; balance ₹1,300; reimbursed ₹4,700.

Purchases, sales and returns books (simple and columnar)

Purchases book: records credit purchases of goods only, at the net amount after trade discount.

Format: Date | Invoice No. | Name of supplier (Particulars) | L.F. | Details | Amount.

The 'Details' column shows quantity × rate and the trade discount; the 'Amount' column the net figure.

Sales book: the same for credit sales of goods, with the customer's name.

Columnar day books add separate amount columns for departments or products (e.g. TVs, fans, mixers), so sales or purchases of each line are known.

Returns books (simple format): purchases returns book (Date | Debit note No. | Supplier | L.F. | Amount) and sales returns book (Date | Credit note No. | Customer | L.F. | Amount). A debit note is sent to the supplier when goods are returned; a credit note is sent to a customer who returns goods.

Not recorded in these books: cash purchases or sales (cash book), and credit purchase or sale of assets (journal proper).

Posting: each supplier is credited individually ('By Purchases A/c'); the monthly total is debited to Purchases A/c ('To Sundries as per Purchases Book'). Each customer is debited individually; the total is credited to Sales A/c.

Worked example

Suppose Elite Electronics, in August 2026: bought 10 LED TVs @ ₹18,000 from Sharma Bros less 10% trade discount (credit); bought furniture on credit from Woodcraft ₹40,000; bought goods for cash ₹12,000. What appears in the purchases book? [2 marks]

Try it first, then show the solutionSolution

1. TVs: 10 × 18,000 = 1,80,000 less 10% = ₹1,62,000, entered against Sharma Bros.
2. Furniture (an asset) goes to the journal proper; the cash purchase goes to the cash book.

Answer: Only Sharma Bros ₹1,62,000 appears in the purchases book.

Journal proper and posting from subsidiary books

The journal proper records what no special book covers:

• Opening and closing entries; adjusting entries; transfer entries; rectification of errors.
• Credit purchase or sale of assets.
• Goods withdrawn by the owner, free samples, charity, loss by fire or theft.
• Bad debts; interest on capital or drawings; depreciation.
• Dishonour of a cheque or bill; endorsement of bills.

Posting rules from subsidiary books

Book	Individual items posted to	Periodic total posted to
Purchases book	Credit of each supplier	Debit of Purchases A/c
Sales book	Debit of each customer	Credit of Sales A/c
Purchases returns book	Debit of each supplier	Credit of Purchases Returns A/c
Sales returns book	Credit of each customer	Debit of Sales Returns A/c
Cash book	Opposite side of each account named	Discount column totals to Discount Allowed / Received
Petty cash book	—	Each analysis column total to its expense account

Worked example

Suppose the purchases book total for August is ₹2,58,400 and the purchases returns book total is ₹16,200. Show how the totals are posted. [2 marks]

Try it first, then show the solutionSolution

1. Purchases A/c (debit side): 'To Sundries as per Purchases Book 2,58,400'.
2. Purchases Returns A/c (credit side): 'By Sundries as per Purchases Returns Book 16,200'. Individual suppliers are posted separately on the opposite sides.

Answer: Purchases A/c Dr ₹2,58,400 total; Purchases Returns A/c Cr ₹16,200 total; suppliers posted individually.

Subsidiary Books and Cash Book in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Topics in this chapter

• Petty Cash Book and the Purchases, Sales and Returns Books
• Triple Column Cash Book, Contra Entries and Overdraft

Subsidiary Books and Cash Book: key facts

Net amount in a day book

Net amount = Quantity × Rate − Trade discount

Imprest reimbursement

Reimbursement = Total petty expenses of the period = Imprest − Balance in hand

Deposit to keep a fixed cash balance

Deposit = Cash available − Required balance (withdraw if negative)

Cash received in a settlement

Cash/cheque received = Amount due − Discount allowed

The full amount due is credited to the customer.

Subsidiary Books and Cash Book: diagrams to practise

Practise each one on paper: draw it from the checklist, then tick off every label.

How the school exam asks Subsidiary Books and Cash Book

The question patterns to expect, and the method that works for each.

Tricks to remember Subsidiary Books and Cash Book

Short memory aids. Say each one aloud once, then use it on a question the same day.

• DCB on both sides

  Discount, Cash, Bank: the order of the three columns on each side.

  Use it when: Drawing the triple column format.

• Contra = 'C' and no posting

  Cash ↔ Bank is the business talking to itself: write it twice in the cash book, post it nowhere.

  Use it when: Deposits and withdrawals for office use.

• Goods + Credit = Day book

  Only when both words apply does the item go to the purchases or sales book.

  Use it when: Choosing the book.

Subsidiary Books and Cash Book: exam-level solved questions

Ordered from exam level to HOTS. Cover the solution, write your own, then compare step by step.

Case-study practice (Section A style)

Read the situation, then answer every part. In a school exam set on the board pattern this is a 6-mark question split into 1 + 2 + 2 + 1 marks.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Where students lose marks in Subsidiary Books and Cash Book

The slips examiners see most often, and what to write instead.

• ✗Mistake: Entering a cheque not deposited the same day directly in the bank column

  The syllabus specifically tests the contra entry: the cheque is cash on the day received and moves to bank on deposit.

  ✓Do this: Read the wording: 'deposited the same day' → Bank column; otherwise → Cash column, then contra.

  Usually costs: 1-2 marks.

• ✗Mistake: Balancing the discount columns

  Discount columns are totalled and posted to two different nominal accounts; balancing them nets allowed against received, which is wrong.

  ✓Do this: Total each side's discount column separately; never write a balance in them.

  Usually costs: 1 mark.

• ✗Mistake: Recording the full debt in the cash column in a settlement

  Only the cash or cheque actually received goes in the cash/bank column; the discount goes in the discount column.

  Wrong working

  To Amit: Cash 20,000.

  Right working

  To Amit: Discount 400, Cash 19,600.

  ✓Do this: Cash/bank = amount received; discount = due − received.

  Usually costs: 1 mark and the balance.

• ✗Mistake: Putting cash purchases or asset purchases in the purchases book

  The purchases book is only for credit purchases of goods.

  ✓Do this: Apply 'goods + credit'.

  Usually costs: 1 mark per item.

• ✗Mistake: Depositing the full cash balance instead of the excess

  The question fixes the closing cash balance; the deposit is only the excess over it.

  ✓Do this: Total the cash column before the last entry; deposit = available − required.

  Usually costs: 1-2 marks.

Practice questions on Subsidiary Books and Cash Book

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

1. Q1 · 1 mark · MCQExam level

   In a triple column cash book, the debit side discount column records:
   (a) discount received
   (b) trade discount
   (c) discount allowed
   (d) bank charges

   Hint

   Debit side = receipts from customers.

   Answer

   (c) discount allowed.

2. Q2 · 2 marks · Short answerExam level

   What is a contra entry? Give two examples.

   Hint

   Cash and bank both involved.

   Answer

   An entry recorded on both sides of the cash book because it affects both cash and bank, marked 'C' and not posted to the ledger. Examples: cash deposited into bank; cash withdrawn from bank for office use (also a cheque earlier treated as cash, deposited later).

3. Q3 · 3 marks · Short answerExam level

   State three advantages of the imprest system of petty cash.

   Hint

   Control and convenience.

   Answer

   Fixed float limits the risk of misuse; cash in hand plus vouchers must always equal the imprest, so checking is easy; the head cashier is freed from small payments; expense-wise totals reduce ledger postings.

4. Q4 · 2 marks · Short answerHarder exam level

   Suppose a sales book shows: 5 Sold to Gupta & Sons 40 shirts @ ₹600 less 15% trade discount; 12 Sold old office printer on credit to Rahul ₹6,000; 18 Sold to Mehra 25 trousers @ ₹900 less 10%; 22 Cash sales ₹15,000. Find the sales book total.

   Hint

   Exclude the printer and the cash sale.

   Answer

   Gupta & Sons: 24,000 − 3,600 = ₹20,400; Mehra: 22,500 − 2,250 = ₹20,250; total ₹40,650.

5. Q5 · 2 marks · Short answerHarder exam level

   Suppose a cash book shows cash available ₹14,800 before closing on 31st March; the firm keeps ₹6,000 as its closing cash balance. The bank balance before this is an overdraft of ₹9,000. Record the adjustment and find the closing bank position.

   Hint

   Excess cash reduces the overdraft.

   Answer

   Deposit 14,800 − 6,000 = ₹8,800 (contra: Bank Dr, Cash Cr). Bank: overdraft 9,000 − 8,800 = ₹200 (still a credit balance).

6. Q6 · 3 marks · Short answerHOTS / competency

   Record in a triple column cash book: received a cheque from Leena ₹14,550 in full settlement of ₹15,000 on 10th, deposited on 12th; the cheque was dishonoured on 16th. Which entry on 16th, and where is the discount treated?

   Hint

   On dishonour the discount is cancelled.

   Answer

   10th: Dr Discount 450, Cash 14,550 (To Leena). 12th: contra Bank Dr 14,550, Cash Cr 14,550. 16th: credit side 'By Leena' Bank 14,550; the discount of ₹450 is also cancelled through the journal proper: Leena Dr 450 To Discount Allowed 450, so Leena owes ₹15,000 again.

7. Q7 · 3 marks · Short answerHOTS / competency

   A petty cashier's float was ₹6,000. At the month-end she has ₹1,140 in cash and vouchers totalling ₹4,610. What does this show, and how much is reimbursed?

   Hint

   Cash + vouchers should equal the imprest.

   Answer

   1,140 + 4,610 = ₹5,750, which is ₹250 short of the ₹6,000 imprest: a missing voucher or a cash shortage, to be investigated. Reimbursement under imprest is the amount needed to restore the float: 6,000 − 1,140 = ₹4,860, of which ₹250 must be accounted for (or charged as a shortage).

8. Q8 · 3 marks · Short answerHarder exam level

   Prepare a sales returns book: 8 Gupta & Sons returned 5 shirts (sold @ ₹600 less 15%); 21 Mehra returned 2 trousers (sold @ ₹900 less 10%). Post to the ledger.

   Hint

   Returns at the net price charged.

   Answer

   Gupta & Sons: 5 × 600 × 0.85 = ₹2,550; Mehra: 2 × 900 × 0.90 = ₹1,620; total ₹4,170. Posting: Sales Returns A/c Dr 4,170 (total); Gupta & Sons Cr 2,550; Mehra Cr 1,620.

9. Q9 · 2 marks · Short answerHarder exam level

   Why is the cash book called both a book of original entry and a ledger account?

   Hint

   Is Cash A/c opened separately?

   Answer

   Cash transactions are first recorded in it (original entry), and it is ruled and balanced like the Cash and Bank accounts, so no separate Cash or Bank A/c is opened in the ledger; only the other side of each entry is posted.

10. Q10 · 3 marks · Short answerHarder exam level

    Suppose a columnar sales book of a sports shop has columns for Cricket, Football and Fitness. Credit sales in June: Cricket ₹48,000, ₹36,500; Football ₹22,000; Fitness ₹31,200, ₹18,800. Find each column total and the sales book total, and state one benefit of this format.

    Hint

    Add down each column.

    Answer

    Cricket ₹84,500; Football ₹22,000; Fitness ₹50,000; total ₹1,56,500. Benefit: the owner sees the sales of each product line without extra analysis, which helps in stocking and pricing.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1. 1.Order of columns in a triple column cash book?Show answer

   Discount, Cash, Bank on each side.

2. 2.Are contra entries posted to the ledger?Show answer

   No.

3. 3.Petty cash reimbursement under imprest equals?Show answer

   The amount spent during the period.

4. 4.Which book records credit purchase of machinery?Show answer

   Journal proper.

5. 5.Cheque received and not deposited the same day: which column?Show answer

   Cash column; contra when deposited.

6. 6.Sales returns book total is posted to?Show answer

   The debit of Sales Returns A/c.

Quick revision checklist

The night before the exam: can you do each of these without looking?

• ☐Cash book: book of original entry and ledger account in one.
• ☐Triple column: Discount | Cash | Bank on both sides.
• ☐Contra (C): both sides, not posted.
• ☐Cheque not banked the same day: Cash column first, contra later.
• ☐Discount columns: totalled, not balanced.
• ☐Imprest: reimburse exactly what was spent.
• ☐Day books: credit purchases or sales of goods only, net of trade discount.
• ☐Totals of day books go to the nominal account; individuals to personal accounts.

Subsidiary Books and Cash Book: frequently asked questions