Drawbacks or limitations of subsidiary books are described as follows:
1. Not Suitable For All Types Of Business
Subsidiary books system is suitable for large business organizations with large number of transaction only. It is not applicable for medium and scale business firms with small volume of transactions.
2. Expensive
This system of accounting is very costly because of different journal books and large number of employees. So, subsidiary books system is not preferred by small business houses.
3. Complex
Due to large number of accounting personnel and different number of books, it is complex for the management to maintain coordination between different tasks and personnel. So, it is complicated method of accounting.
Also Read:
Also Read:
4. Lack Of Complete Information
Subsidiary books system fails to provide proper financial information because it lacks chronological order of recording the transaction.
5. Requirement Of Knowledge
This system requires proper accounting knowledge. Incorrect recording of transactions may create problem in whole accounting process.
