SUBSIDAIRY BOOKSBY SHIVPRASAD VENGURLEKAR By PresenterMedia.com
TYPES OF SUBSIDAIRY BOOKS•PURCHASE BOOK•PURCHASE RETURN BOOK•SALES BOOK•SALES RETURN BOOK
•PURCHASE BOOKMEANING & PURPOSEPurchases book or purchases day book is a book of original entry maintained to record credit purchases. You must note that cash purchases will not be entered in purchases day book because entries in respect of cash purchases must have been entered in the cash book. At the end of each month, the purchases book is totaled. The total shows the total amount of goods purchased on credit. Purchases book is written up daily from the invoices received. The invoices are consecutively numbered. The invoice of each number is noted in the purchases book.
FORMATThe following is the format of purchases day book: DATE NAME OF SUPPLIER INVOICE L. F. AMOUNT NO.
RULINGIt is not ruled like the ordinary journal. The first column in thisbook is for date. In the second column, the name of thesupplier or the seller, quantity of each article bought,description of the article, rate etc., are recorded. Sometimes aseparate column to record the details of the transactions isadded in the purchases day book. The third column is forinvoice number. The fourth column is for ledger folio. The lastcolumn gives the total amount due to the supplier.
POSTINGThe total of the purchases book is posted to the debit ofpurchases account. Names of the suppliers appear in thepurchases book. These parties have supplied the goods.They are, therefore, credited with the amount appearingagainst their respective names. The double entry will thusbe completed.
•Sales Day Book MEANING and PURPOSEA sales book is also known as sales day book. It is a book of original entry in which the details of credit sales are recorded by a businessman. Total of sales book shows the total credit sales of goods during the period concerned. Usually the sales book is totaled every month. The sales day book is written up daily from the copies of invoices sent out.
FORMATFOLLOWING IS THE FORMAT OF SALES BOOKDATE NAME OF THE CUSTOMERS INVOICE L.F. AMOUNT NO.
RULINGIt is ruled like purchase book. The first column in this bookis for date. In the second column, the name of thecustomer or the buyer, quantity of each article bought,description of the article, rate etc., are recorded.Sometimes a separate column to record the details of thetransactions is added in the purchases day book. The thirdcolumn is for invoice number. The fourth column is forledger folio. The last column gives the total amount duefrom the customer.
POSTINGThe total of the sales book is creditedto sales account. Customers whose names appearin the sales book are debited with the amountappearing against their names. Double entry isthus completed.
•PURCHASE RETURN BOOKMEANING & PURPOSE• Purchases returns book is a book in which the goods returned to suppliers are recorded. It is also called returns outward book or purchases returns day book. Goods may be returned because they are of the wrong kind or not up to sample or because they are damaged etc. The ruling of this book is absolutely the same as of purchases day book.
FORMATFOLLOWING IS THE FORMAT OF PURCHASE RETURN BOOKDATE NAME OF THE CUSTOMERS DEBIT L.F. AMOUNT NOTE
DEBIT NOTEWhen the goods are returned to the suppliers, an intimation issent to them through what is known as a debit note. Thesedebit notes serve as vouchers for these entries. A debit note isa statement sent by a businessman to another person,showing the amount debited to the account of the later. Debitnotes are usually serially numbered and are prepared in thesame form as that of the invoice.
POSTINGThe total of the purchases returns or returnsoutwards book is credited to returns outwardaccount or purchases return account (being thegoods sent out). Individual suppliers to whomgoods are returned are debited (because theyreceive the goods).
•SALES RETURN BOOKMEANING & PURPOSESales returns book is also called returns inwards book. It is used for recording goods returned to us by our customers. The ruling of this books is exactly as the sales day book.
FORMATFOLLOWING IS THE FORMAT OF SALES RETURN BOOKDATE NAME OF THE CUSTOMERS CREDIT L.F. AMOUNT NOTE
CREDIT NOTECustomers who return goods should be sent a credit note.It is a statement sent by a business to another personshowing the amount credited to the account of the later.Credit notes are serially numbered and are similar in formto the invoices. These are usually printed in red ink. Creditnotes issued to customers are vouchers for the entriesappearing in the sales returns book.
POSTINGThe total of the returns inwards book or salesreturns book is debited to returns inwardsaccount or sales returns account. The customerswho have returned the goods are creditedwith the amount shown against their names.
POINTS TO REMEMBER ONLY CREDITTRANSACTIONS OF GOODS ARE RECORDED INSUBSIDIARY BOOKS LIKEPURCHASE BOOK,SALES BOOK,PURCHASE RETURN BOOK,SALES RETURN BOOK