Explain the need for drawing up the special purpose books.
As a business grows, the number of transactions increases significantly, making it cumbersome to record every transaction in a single journal. To address this, the journal is subdivided into special purpose books (also known as subsidiary books or daybooks). These books are designed to record transactions of a similar nature, such as all cash transactions in a Cash Book, all credit sales in a Sales Book, and all credit purchases in a Purchases Book.
The primary need for special purpose books is to enable quick, efficient, and accurate recording of the large volume of repetitive transactions. By grouping similar transactions together, the recording process becomes streamlined and less prone to errors. Additionally, special journals prove economical as they save time and effort.
Another crucial need is to facilitate division of labour in accounting work. Different individuals can be assigned to maintain different special journals, improving productivity and specialisation. For transactions that do not fit into any special journal, a Journal Proper is used.
Thus, special purpose books are essential for managing the accounting records of an expanding business effectively.
Explanation
This answer directly uses the provided textbook context. It explains that as a business expands, a single journal becomes impractical, so the journal is divided into special journals (subsidiary books). The need arises for quick, efficient, accurate recording, handling repetitive transactions, economy, and division of labour. The context also lists examples like Cash Book, Purchases Book, Sales Book, and Journal Proper.