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DateDate ParticularsParticulars L.FL.F AmtAmt
DrDr
AmtAmt
CrCr
This book is kept to record all credit purchases of goods for resale. To be eligible for being recorded in the purchase book ,the goods purchased on credit must be those in which the firm normally deals. Cash purchases of goods are entered in the CASH BOOK, so these are not recorded in PURCHASES BOOK. This book is also known as Invoice book. The ruling of the purchases book is as follows :
DateDate ParticularsParticulars L.FL.F AmtAmt
DrDr
AmtAmt
CrCr
In many businesses, a considerable proportion of sales will be made on credit rather than immediate cash. In fact the sales of some businesses will consist entirely of credit sales. For each credit sale, the selling firm will send a document to the buyer showing full details of the goods sold and the price of the goods. This document is known as an invoice and to the seller it is known as sales invoice. The specimen ruling of sales book is given below :
DateDate ParticularsParticulars L.FL.F AmtAmt
DrDr
AmtAmt
CrCr
This book keeps the records of the returns outward, that is, return of goods bought. The person returning the goods sends a debit note to the supplier informing him that he is debiting the latter’s account with the amount of goods returned. This book is also known as returns outwards books. The specimen is given below :
DateDate ParticularsParticulars L.FL.F AmtAmt
DrDr
AmtAmt
CrCr
Sales return book, also known as return inward book, is kept for recording returns inwards, that is, returns of goods sold by us. The trader sends a credit note to the customer informing him that he has credited the latter’s account with the value of goods returned. The specimen is as follows :
Debit Note & Credit NoteDebit Note & Credit Note
A debit note is prepared when goods are A debit note is prepared when goods are returned by the purchaser due to some returned by the purchaser due to some reason. Two copies of this note are reason. Two copies of this note are prepared. The original copy is sent to the prepared. The original copy is sent to the party to whom goods are return and the party to whom goods are return and the duplicate is kept in the office.duplicate is kept in the office.
A credit note is like a debit note. It is sent A credit note is like a debit note. It is sent by the seller to the purchaser for the by the seller to the purchaser for the goods returned by the latter to the former. goods returned by the latter to the former.
Journal ProperJournal Proper Journal proper is used for recording only Journal proper is used for recording only
those transaction which can not be those transaction which can not be recorded in any of the other subsidiary recorded in any of the other subsidiary books examples of such transaction are books examples of such transaction are
Opening entries Opening entries Transfer Entries Transfer Entries Adjusting Entries Adjusting Entries Closing Entries Closing Entries Bad debts Bad debts
Practical ProblemsPractical Problems
Question..Question.. From the following transaction From the following transaction prepare the prepare the sales return bookssales return books of rajeshwari of rajeshwari trading company:trading company:
2002 2002
Jan-1 Prabhaker and co. returned 50 bags of Jan-1 Prabhaker and co. returned 50 bags of rice, the rate of which is rupees 550 per bag rice, the rate of which is rupees 550 per bag
Jan-2 Raja and co. return 40 bags of sugar the Jan-2 Raja and co. return 40 bags of sugar the rate of which is rupees 750 per bag rate of which is rupees 750 per bag
Jan-10 Subhash and sons returned 10 tons of Jan-10 Subhash and sons returned 10 tons of ground oil, the rate of which is rupees 600 per ton ground oil, the rate of which is rupees 600 per ton
Jan-20 Ugandhar returned goods worth rupees Jan-20 Ugandhar returned goods worth rupees 400400
DateDate Credit Credit note No.note No.
Particulars Particulars L.FL.F Amt.Amt.
20022002
Jan-1Jan-1
Jan-2Jan-2
Jan-10Jan-10
Jan-20Jan-20
11
22
33
44
Prabhaker and co :Prabhaker and co :
50 bags of rice @ Rs. 550 per bag.50 bags of rice @ Rs. 550 per bag.
Raja and co :Raja and co :
40 bags of sugar @ Rs. 750 per bag40 bags of sugar @ Rs. 750 per bag
Subhash and sons Subhash and sons
10 tons of ground nut oil @ Rs. 660 per ton10 tons of ground nut oil @ Rs. 660 per ton
UgandharUgandhar
Sales return account Dr.Sales return account Dr.
27,50027,500
30,00030,000
6,0006,000
400400
63,90063,900
Question..
On Jan 1,2002 Moti’s assets were :
Cash Rs.2000;due from Jeevan Rs.1,000; stock Rs.3,000; furniture Rs.5000; and he had to pay kishore RS.2,000.
The following transactions took place :
Jan. 2 Purchased furniture from Hanuman for Rs. 200.
Jan. 5 Received payment from Jeevan, discount allowed being 2%
8 Sold to Mahendra 10 watches, sent invoice at Rs.300 per watch, allowed 10% trade dis.
12 Sent to Mahendra a credit note because price per watch was Rs. 250 and not Rs. 300
20 Settled kishore’s account to the extent of Rs. 1,000 only,he allowed 2.5% discount
25 Purchased from kishore goods of the list price of Rs. 1,500.He allowed 20% trade dis.
28 Paid the amount due to Hanuman.
31 Paid salaries Rs. 200 and rent Rs. 100.
Prepare Moti’s subsiiary books and balance these books on 31st Jan. ,2002.
DATEDATE PARTICULARSPARTICULARS L.FL.F Dr.Dr. Cr.Cr.
20022002
Jan 1Jan 1
Jan 2Jan 2
Cash a/c Dr.Cash a/c Dr.
Jeewan a/c Dr.Jeewan a/c Dr.
Stock a/c Dr.Stock a/c Dr.
Furniture a/c Dr.Furniture a/c Dr.
To kishore To kishore
To capital a/cTo capital a/c
(being opening entry passed)(being opening entry passed)
Furniture a/cFurniture a/c
To hanunamTo hanunam
(being furniture bought for credit) (being furniture bought for credit)
20002000
10001000
30003000
50005000
200200
20002000
90009000
200200
DateDate ParticularsParticulars L.FL.F DetailsDetails TotalTotal
20022002
JAN JAN 2525
Jan 31Jan 31
KishoreKishore
Goods:Goods:
Less:20% Trade Less:20% Trade discountdiscount
purchase a/c Dr.purchase a/c Dr.
Rs.Rs.
15001500
300300
12001200
DateDate ParticularsParticulars L.FL.F DetailsDetails TotalTotal
20022002
Jan 8Jan 8 MahendraMahendra
10 watches @ Rs. 300 each 10 watches @ Rs. 300 each
Less:10% Trade discount Less:10% Trade discount
sales a/c Crsales a/c Cr
RsRs
30003000
300300
Rs.Rs.
27002700
27002700
DateDate ParticularsParticulars L.FL.F detailsdetails TotalTotal
20022002
Jan 12Jan 12
Jan 31Jan 31
MahendraMahendra
Overcharge on 10 watches Overcharge on 10 watches @Rs.50 each in in voice dated @Rs.50 each in in voice dated Jan 8, 2002Jan 8, 2002
Less:10% trade discountLess:10% trade discount
Returns Inwards a/c Dr.Returns Inwards a/c Dr.
500500
5050 450450
450450