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The accounting procedure, for recording information, involves two steps, namely journalizing and posting. It follows that every business must maintain a journal (books of original or prime entry) and a ledger (principal book). Thus the system of book-keeping originally e

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

nvisages that all the transactions must be recorded first in the book of original record, i.e., journal and then each transaction so recorded in the journal should be posted in the principal book, i.e., ledger. Subsequently it was experienced that the labor of recording

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

each transaction with narration in the journal and then posting each entry in two different accounts in the ledger was enormous. The procedure was more time-consuming and resulted in higher establishment cost.

It is but natural that in every business most of the transac

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ions relate to receipts and payments of cash; purchases of goods ;. sales of goods etc. It was found to be convenient and economical to keep separate books to record each particular class of transactions. Each separate book meant to record transactions of a particular cl

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ass is the book of original or prime entry. It is also known as sub-journal or subsidiary book. The system under which transactions of similar nature are entered in the relevant' subsidiary book and on the basis of which ledger is written is known as the 'practical syste

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

m of book- keeping'. This system reduces labor and time of recording the transactions as impersonal accounts, viz., sales account, purchases account etc., receive the posting of totals and not of individual transactions. However, this system also conforms to the basic ru

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

es of the double entry system.

Generally the following subsidiary books are used in the business:

(1) Cash book : records receipts and payments of cash including transactions relating to bank;

(2) Purchases book: records credit purchases of goods meant for sale or for

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

conversion into finished goods;

(3) Returns outwards book: records return of the goods to the suppliers due to several reasons;

(4) Sales book: records credit sales of the goods dealt in by the business;

(5) Returns inwards book : records the return of goods by the c

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ustomers to the business ; (vi) Bills receivable book: records the receipts of bills of exchange, promissory notes and hundies of various parties;

(6) Bills payable book: records the issue of bills exchange, promissory notes and hundies to the various parties:

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

dvantages of sub-journals

(1) It results in saving of time by (a) enabling the recording procedure to be carried on simultaneously in different subsidiary books and (b) by posting the periodical totals in the impersonal accounts.

(2) It makes information avail

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

able regarding each particular class of transactions.

(3) At the time of preparing trial balance the checking is easier because books being many, different persons can carry out the job.

Cash Book

In any business, perhaps, the largest number of transa

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ctions of one nature must relate to cash and bank. It is so because every transaction must, ultimately, result in a cash transaction. Now if every cash transaction is to be recorded in journal, it will involve an enormous amount of labor in debiting or crediting cash or

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ank account in the ledger for each transaction. Therefore, it is convenient to have a separate book, the cash book, to record such transactions. Maintaining of cash book removes the necessity of having cash and bank accounts in the ledger. This book enables us to know th

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

e balance of cash in hand and at bank at any point of time.

Cash book consists of cash and bank accounts taken out of ledger and maintained separately; thus it is a substitute of ledger for cash and bank accounts. It is also a book of original entry because cash and ban

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

k transactions are not recorded in any other subsidiary book.

Types of cash books

The type of cash book to be used by any business will depend upon its nature and requirements. It may be anyone of the following:

(1) Single column ca

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

h book (cash column).

(2) Double column cash book (cash and discount columns).

(3) Triple column cash book (cash, discount and bank columns).

(4) Bank cash book (bank and discount columns).

Generally, each business will use anyone of the above types of cash book alon

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

g with "petty cashbook" which is maintained on memorandum basis.

Distinction between cash A/c and Cash book

Actually cash book is a perfect substitute of cash account. In both, cash transactions are recorded date wise in order of occurrence. Cash balan

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ce as on any date can be ascertained by balancing both on any day desired. Yet there are some differences between the two as given below:

Cash account

1. Is an account in the ledger.

2. Cash account is part of the ledger. Cash account is opened in the ledger in which

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

osting is done from some book of original entry i.e. journal

3. In cash account posting is not followed by narration.

4. It only records one aspect of transaction involving cash and bank.

Cash book

1. Is a separate book of accounts forming part of accounting system.

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

2. Cash book records entries directly from transactions and these is no need for a book of prime entry.

3. In cash book entries are followed by narration also.

4. It records both the aspects of this transaction in cash and bank columns to complete double entry posting

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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What is GAAP? GAAP, or Generally Accepted Accounting Principles, refers to rules and parameters set by the Accounting Practices Board of the American Institute of Certified Public Accountants. GAAP also includes certain established ways of accounting, which may or may not have been set by any authority.

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