Question

Explain the need for drawing up the special purpose books

Answer 1

The needs for drawing up the special purpose book are given below.

1. Quick and efficient recording: It is a time-consuming process to record all the transactions in a journal.

If there are separate books, then recording of transactions can be done more efficiently and timely.

So, the need of special purpose book arises.

2. Repetitive nature: In every business, some transactions are similar and repetitive in nature.

It will be more convenient to record all similar transactions at one place.

For example, all credit sales transactions are recorded in the Sales Book.

3. Economical: It is more economical as recording through the special purpose books saves time and also enhances the efficiency of accountants and clerks.

4. Easy posting: If similar transactions are recorded at one place, posting becomes easier.

5. Complete information at one place: All information related to purchases, sales, cash receipts, payments, etc. are easily and hassle-free available.