What are special purpose books?
Special purpose books, also known as subsidiary books or daybooks, are books of original entry created by sub-dividing the Journal for quick, efficient, and accurate recording of business transactions. When a business expands and the number of transactions becomes large, journalising each transaction in one book becomes cumbersome.
These books are designed to record all transactions of a similar nature together. For example, all cash transactions are recorded in one book, all credit sales in another book, and all credit purchases in yet another book.
The main types of special purpose books include: Cash Book, Purchases Book, Sales Book, Purchases Return (Return Outwards) Book, Sales Return (Return Inwards) Book, and Journal Proper (for transactions that cannot be recorded in any special journal). Special journals prove economical and make division of labour possible in accounting work.
Explanation
The textbook context explains that special purpose books are created when the Journal is sub-divided to handle large volumes of transactions efficiently. The context lists all the specific types of special purpose books and emphasizes that they help record transactions of similar nature together, making accounting work more economical while enabling division of labour.
Solution Steps
Step 1: Define special purpose books as subsidiary books/daybooks created by sub-dividing the Journal
Step 2: Explain the purpose - quick, efficient, accurate recording when transactions become numerous
Step 3: List the six types: Cash Book, Purchases Book, Sales Book, Purchases Return Book, Sales Return Book, Journal Proper
Step 4: State benefits - economical and enables division of labour