-Pushpender Kumar, Academic content writer at Edumarz
Every businessman comes across many transactions in their business regularly.
So because of huge no. Of transactions, businessmen record their activities in books which are known as the recording of transactions.
Every transaction is recorded based on the source of documents which are proof of transactions that took place in business.
Recording of transactions helps businessmen to remember all the transactions.
Initially, transactions are recorded in the journal book or subsidiary book then all of these transactions are posted in ledger accounts which are made of the particular head such as Cash account, Purchase account, Sales Account, etc.
If businessmen record their transactions in a journal book so they have to make all ledger accounts, but if they record their transactions in the subsidiary book so they don’t need to make a cash account in the ledger because in the subsidiary book a cash book is maintained which performs as a cash account of the ledger.