5-subsidary-books-_non-cash-transaction_st.pdf

Subsidiary Books - Non-cash Transaction

Samir K Mahajan

SUBSIDIARY BOOKS

Kinds of Subsidiary Books/special journal/books of primary records/special journalGenerally, transactions are of two types: Cash and Credit. On that basis, we have

Subsidiary Books - Non-cash Transaction Subsidiary Books - Cash Transaction

Samir K Mahajan

SUBSIDIARY BOOKS - NON-CASH TRANSACTION

Day Bookso Purchases Book : Purchases Book records only credit purchases of goods ( goods here means on which the

trader s dealing) by the trader. Cash purchases of goods, cash and credit purchases of assets are notentered in this book.

o Sales Book: Sales Book is meant for entering only credit sales of goods by the trader. Cash sales, cash andcredit sales of assets are not entered in this book.

o Purchases Return (Returns outward)Book: Purchases Return (Returns outward)Book records the goodsreturned by the business entity to suppliers.

o Sales Return (Returns inward)Book: Sales Return (Returns inward)Book deals with goods returned (out ofprevious sales) to the business entity by the customers.

Bill bookso Bills Receivable Book : Bills Receivable Book records the receipts of bills (Bills Receivable).o Bills Payable Book: Bills Payable Book records the issue of bills (Bills Payable).

Samir K Mahajan

SUBSIDIARY BOOKS - NON-CASH TRANSACTION contd.

The reasons for the return of goods arei. not according to the order placed.ii. not up to the samples which were already shown.iii. due to damage condition.iv. due to difference in the prices charged.v. undue delay in the delivery of the goods.

Samir K Mahajan

SPECIMEN FORMAT OF PURCHASE BOOK

Date Inward Invoice Number

Particulars Name of Suppliers

(Account to be credited)

L.F. Amount

Details (Rs) Total (Rs)

i. Date Column Represents the date on which the transaction took place.ii. Particulars Column This column includes the name of the seller and the particulars of goodspurchased.iii. Inward Invoice No. Column Reveals the serial number of the inward invoice. Inward Invoice areprepared by the seller of goods showing details about goods, its price and other expenses incurred.iv. LF. Column This column shows the page number of the suppliers account in the ledger accounts.v. Details Column Reveals the amount of goods purchased and the amount of trade discount.vi. Total Column This column represents the net price of the goods, i.e, the amount which is payableto the creditors after adjusting discount and expenses if any.

Samir K Mahajan

PURCHASE BOOK : Example

Record the following transactions on purchase book2006:March1 Purchases from Purohit Furnishers, Gandhi Nagar (Invoice no. 516)

20 Chairs @ Rs 1500 each2 Tables @ Rs 4000 eachLess trade discount @ 10%

March7 Bought M/S Roy and Co. , Ahmedabad (Invoice number 700)20 Stools @Rs. 1250each10 collapsible chairs @Rs. 2000 eachDelivery and cartage Rs. 150

March 21 Purchased from Patel Enterprise . Surat (Invoice nu. 909)10 chairs @ 1500 each15 steel cabinet @ Rs. 1500 eachpacking and Delivery Charges Rs 250Less trade discount @ 10%

March 25 Purchased from Ojha and sons, Baroda (Invoice no. 1000)2 laptops @ Rs 30000 for office use

March 26 Purchase 10 Mini Chairs @ 500 on cash

Samir K Mahajan

PURCHASE BOOK/PURCHASE JOURNAL

Date Inward Invoice Number



L.F. Amount


2006March1

March 7

516

700

Purohit Furnishers, Gandhinagar20 Chairs @ Rs 1500 each2 Tables @ Rs 4000 each

Less: trade discount @ 10%

M/S Roy and Co. , Ahmedabad20 Stools @Rs. 1250each

10 collapsible [email protected] each

Add: Delivery and cartage Rs. 150

300008000

34200

45150

380003800

2500020000

45000150

PURCHASE BOOK : Example contd.

Samir K Mahajan

PURCHASE BOOK/PURCHASE JOURNAL

March 21

909 Patel Enterprise . Surat10 chairs @ 1500 each15 steel cabinet @ Rs. 1500 each

Less: trade discount @ 10%

Add: packing and Delivery Charges

Purchase A/C Dr

1500022500

34000

375003750

33750250

113350

PURCHASE BOOK : Example contd.

Notes: 1. Purchase of laptop will not be recorded in the purchase book, since laptop are assets2. Trade discount is allowed on price of goods excluding delivery charges and cartage 3. Delivery charges and cartage is direct expense, chargeable from purchaser, so added to the amount payable4. Purchase on mini chair is cash purchase and hence is not recorded in purchase book.

Samir K Mahajan

SPECIMEN FORMAT OF SALES BOOK

Date Outward Invoice Number

Particulars Name of Customer

(Account to be debited)

L.F. Amount


i. Date Column Represents the date on which the transaction took place.ii. Particulars Column This column includes the name of the customer and the particulars of goods sold.iii. Outward Invoice No. Column Reveals the serial number of the outward invoice. Outward Invoice are sent to thecustomer of goods showing details about goods sold and dispatched, its price.iv. LF. Column This column shows the page number of the customer account in the ledger accounts.v. Details Column Reveals the amount of goods purchased and the amount of trade discount.vi. Total Column This column represents the net price of the goods, i.e, the amount which is payable to the creditorsafter adjusting discount and expenses if any.

Samir K Mahajan

SPECIMEN FORMAT OF SALES BOOK

Enter the following transactions in the sales book of Ojha Enterprise , Ahmedabad2006May 4 sold M/S Dewan Brothers , Ahmedabad (Invoice no. 175)

10 dozens pencils @Rs 20 per dozen14 dozens rubbers @ Rs 60 per dozen

May 14 Sold to Sikh Enterprise, Gandhi Nagar (invoice no. 200)5 dozens of gum bottles @ Rs 5 per bottle70 dozens rulers @ Rs 15 per dozenLess: 10% trade discount

May 17 Sold news papers for Rs 200 (Invoice 215)

May 21 Sold to M/S Raaj and Co., Kalupur (invoice no. 255)10 reams of paper @ Rs 60 per reamless: Trade discount @10 percent

May 25 Sold to Gupta enterprise for cash , Chandkheda (Invoice no. 285)10 dozens pens @ Rs 120 per dozen for cash

May 30 sold old furniture to M/S Patel and Sons, on credit for Rs 17000 (invoice no.300)

Samir K Mahajan

SALES BOOK/SALES JOURNAL

Date OutwardInvoice Number


(Account to be debited )

L.F. Amount


2006May 4

May 14

175

200

M/S Dewan Brothers , Ahmedabad10 dozens pencils @Rs 20 per dozen14 dozens rubbers @ Rs 60 per dozen

Sikh Enterprise, Gandhi Nagar5 dozens of gum bottles @ Rs 5 per bottle

70 dozens rulers @ Rs 15 per dozen

Less: 10% trade discount

200840 1040

1215

3001050

1350135

Sales BOOK : Example contd.

Samir K Mahajan

Sale BOOK/Sale JOURNAL

May 21 255 M/S Raaj and Co., Kalupur10 reams of paper @ Rs 60 per ream

less: Trade discount @10 percent

Sales A/C Cr

60060 540

2795

Sales BOOK : Example contd.

Notes: 1. Sales of news paper will not be recorded in sales book as its is cash sales and the firm is dealing in dealing in

stationaries and not in news paper. 2. Sale of furniture will not be recorded

Samir K Mahajan

SPECIMEN FORMAT OF PURCHASE RETURN (RETURN OUTWARD) BOOK

Date Debit Notice Number


(Account to be Debited )

L.F. Amount Remark


Note: The entries in the Purchases Returns Book are usually made on the basis of debit note issued to the suppliers orcredit note received from the suppliers. We call it a debit note because the partys (supplier) account is debited with theamount written in this note.

Remark highlights the cause of purchase return

Samir K Mahajan

Prepare Purchase return book or return outward book from the following transactions

March 4 Returned to M/S Roy and Co. , Ahmedabad (Debit Notice no. 225)2 collapsible chair @ 2000 each

March 8 Returned to Patel Enterprise, Surat (Debit Notice no. 245)4 chairs @ 1500 each

Less trade discount @ 1%

March 15 Returned to M/S ABC , Baroda (Debit notice no. 315)1 steel Almirah of Rs 4000

PURCHASE Return BOOK : Example contd.

Samir K Mahajan

Purchase Return BOOK/Return Outward Book

Date Debit Notice No.


(Account to be debited )

L.F. Amount


2006March 4

March 8

March 15

225

245

315

M/S Roy and Co. , Ahmedabad2 collapsible chair @ 2000 each

Patel Enterprise, Surat4 chairs @ 1500 eachLess trade discount @ 1%

M/S ABC , Baroda1 steel Almirah of Rs 4000

Purchase Returns A/C CR.

600060

4000

5940

4000

13940

PURCHASE Return BOOK : Example contd.

Samir K Mahajan

SPECIMEN FORMAT OF SALES RETURN (RETURN INWARD) BOOK

Date Credit Notice Number

Particulars Name of Customer


L.F. Amount Remark


Note: The entries in the sales Returns Book are usually made on the basis of credit note issued to the customers or creditnote sent from the customers . We call it a credit note because the partys (customers ) account is credited with theamount written in this note.

Remark highlights the cause of sales return

Samir K Mahajan

Sales Return (Return Inward ward) Book or Journal : Example

Enter the following transactions with sales return book : 2006Jan 9: Returned by M/S Gope and Co. (Credit note: No. 2308)

20 bags coffee @ Rs 300 per Bag 10 Chests Tea @ Rs. 400 per chest

Jan. 17: Returned by Ankita and Sisters

15 tins Ghee @ Rs 500 per tin less trade discount @10 percent

Samir K Mahajan

Sales Return (Return Inward ward) Book or Journal : Example

Sales Return Book/ Journal

Samir K Mahajan

TRADE DISCOUNT

Trade discount is an allowance or concession granted by the seller to the buyer, if the customer purchases goods above acertain quantity or above a certain amount. The amount of the purchase made, is always arrived at after deducting thetrade discount, ie., only the net amount is considered. For example, if the list price (price prescribed by the manufacturersor wholesalers) of a commodity is Rs.100, and trade discount granted by manufacturer to the wholesaler is 20% then costprice of the commodity to the wholesaler is Rs.80. Trade discount is not recorded in the books. They are used fordetermining the net price.

CASH DISCOUNTSale of goods on credit is a common phenomenon in any business. When goods are sold on credit the customers enjoy afacility of making payment on some date in the future. In order to encourage them to make the payment before the expiryof the credit period a deduction is offered. The deduction so made is known as cash discount. For example, If Rampurchases goods worth Rs.5,000 on 30 days credit then, as per the terms of contract, he is authorised to make payment 30days after the date of purchase. If he is offered a cash discount of 2% on payment within 10 days and if he does so,he is entitled to deduct Rs.100 from the invoice price and pay Rs.4,900. In this case Rs.100 is cash discount. But if he doesnot choose to make payment within 10 days then he will not get any cash discount. In this case he will pay Rs.5,000 after30 days.

Samir K Mahajan

5-subsidary-books-_non-cash-transaction_st.pdf

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