The main reasons for subdividing the journal into many subsidiary books are as follows:
- When there is a subdivision of journal in place of a single journal, the entire work can be divided among employees who can do the accounting work simultaneously.
- Proper division of work will lead to specialization which in turn, will lead to increase efficiency of the employees.
- Since a particular day book records only transaction of similar nature, any information in regard to those can be easily collected.
- Since the volume of transactions in a particular day book will be less as compared to single journal, the possibility of errors will be reduced. It will also be possible to locate errors easily.
- It is necessary to post the transactions from the day books to the ledger.
- Cash and credit transactions can be recorded in separate books.
- Journal is inadequate as the sole book of original entry, when the transactions are numerous. Therefore, subdivision of journal is must for big organizations.
- If all types of transactions are recorded in one journal, then the size of the journal will be very large and it will hamper the annual accounting work.