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Principles and Practice of Accounting > Subsidiary Books > Purchase Book and Purchase Return Book
Subsidiary Books

Purchase Book and Purchase Return Book

A Subsidiary book or a Day book is a book of Original entry. Subsidiary books contains the records of similar transactions. An organization maintains six kinds of Subsidiary books. They are Cash book, Purchase book, Purchase Return book, Sales book, Sales return book, and Journal proper.

Organizations that do not maintain the Subsidiary books maintain Journal for all the transactions. A Journal holds records of all entries irrespective of their nature. Thus, Journal does not bifurcate the entries on the basis of their nature.

Purchase Book

Purchase Book

Purchase book is a Subsidiary book. The Purchase book or Purchase day book contains the record of all credit-purchase. Cash book accommodates the records of all goods-purchase.

A Purchase book does not hold the record of purchases of assets. The Journal proper contains those records. The entries are recorded in the Purchase book from source documents. Invoices or bills received from the suppliers of goods serve as the source documents.

We make the entries in the Purchase book with the net amount of the invoice. Which is why a Purchase book does not contain trade discount and other details which are there on the invoice.

Every month the total of the Purchase book is posted on the Debit side of the Purchases A/c. Purchases A/c is a ledger A/c. However, the individual accounts of the suppliers may be posted daily. Also, where the volume of transactions is too large, the entries in the ledger can be posted weekly or fortnightly. Given below is the performa of the Purchase book:

Purchase Book

Date Invoice No. Name of the Supplier L.F.  Amount (₹)

Purchase Return Book

When the goods purchased on credit are returned to the supplier, these are recorded in the Purchase return book. Sometimes, goods purchased can be defective or of low quality, etc. and hence, need to be returned. A separate book is maintained for the purchase return and these are not deducted from the purchases in the Purchase book. Also, Purchase return is recorded at the net amount on the invoice.

Debit note is prepared for every return of goods. It is prepared in duplicate. The original one is sent to the supplier while the duplicate copy is kept for our own records. The Debit note contains the name of the supplier, details of goods returned and the reason thereof. Each debit note is dated and serially numbered.

The supplier may also prepare a Credit note. It is prepared when goods are received from a customer and is therefore sent to him. Given below is the performa of the Purchase return book

Purchase Return Book

Date Debit Note No. Name of the Supplier L.F.  Amount (₹)

Solved Example For You

Q: Record the following transactions in the books of M/s. Mac and Co. and also show the ledger accounts.

Date                                                                   Details
1 Aug Purchased from ABC Ltd. (Invoice No. 524): 2000 balls @ ₹ 5 per piece.
15 Aug Purchased from XYZ Ltd. (Invoice No. 611): 100 bats @ ₹ 250 per piece. Trade discount 20%
29 Aug Purchased from Con Ltd. (Invoice No. 444): 200 skates for ₹100000. Trade discount 10%
29 Aug Purchased from ABC Ltd. (Invoice No. 741): 200 Chess for ₹2000. Trade discount 15%
30 Aug Purchased from Con Ltd. (Invoice No. 521): 100 skates for ₹40000. Trade discount 8%

Ans:

In the Books of M/s. Mac and Co.

Purchase Book

Date Invoice No. Name of the Supplier L.F.  Amount (₹)
 1 Aug  524  ABC Ltd. 10000
2000 [email protected] ₹ 5 per piece.
15 Aug 611 XYZ Ltd. 20000
100 [email protected] ₹ 250 per piece.        = 25000
Less: 20% T.D.                          =   5000
29 Aug 444 Con Ltd. 90000
200 skates @ ₹ 500 per piece    = 100000
Less: 10% T.D.                          =   10000
29 Aug 741 ABC Ltd. 1700
200 Chess @ ₹ 100 per piece     =  2000
Less: 15% T.D.                           = 300 
30 Aug 521 Con Ltd. 36800
100 skates @ ₹ 400 per piece    = 40000
Less: 8% T.D.                            =   3200
31 Aug  Total 167500

Ledger Accounts

ABC Ltd. A/c       

Date Particulars Amount Date Particulars Amount
1 Aug Purchases 10000
1 Aug Purchases 1700

 XYZ Ltd. A/c     

Date Particulars Amount Date Particulars Amount
 15 Aug  Purchases  20000

 Con Ltd. A/c     

Date Particulars Amount Date Particulars Amount
29 Aug Purchases 90000
30 Aug Purchases 36800

                                                                                                                                                                                        Purchases A/c     

Date Particulars Amount Date Particulars Amount
31 Aug Sundries as per Purchase Book 167500

Q: Record the following transactions in the books of M/s. Zen and Co. and also show the ledger accounts

Date

2018

                                                                  Details
3 Aug Returned goods purchased from MNC Ltd. (Debit Note No. 24): 2 T.V. @ ₹ 50000 per piece.
17 Aug Goods returned purchased from Daya Ltd. (Debit Note No. 26): 10 DVD Players @ ₹ 2500 per piece. Trade discount 20%
30 Aug Returned goods purchased from X Ltd. (Debit Note No. 28): 5 refrigerators for ₹60000. Trade discount 10%

 

Ans.                                       In the Books of M/s. Zen and Co.

Purchase Return Book

Date Debit Note No. Name of the Supplier L.F.  Amount (₹)
 3 Aug 24  MNC Ltd. 100000
2 T.V. @ ₹ 50000 per piece
17 Aug 26 Daya Ltd. 20000
10 DVD Players @ ₹ 2500 per piece. = 25000
Less: 20% T.D.                                     =   5000
30 Aug 28 X Ltd. 54000
5 refrigerators @ ₹ 12000 per piece    = 60000
Less: 10% T.D.                                    = 6000
Total 174000

Ledger Accounts
MNC Ltd. A/c                                                                                                                              

Date Particulars Amount Date Particulars Amount
 3 Aug Purchases Return 100000

Daya Ltd. A/c   

Date Particulars Amount Date Particulars Amount
17 Aug Purchases Return 20000

X Ltd. A/c     

Date Particulars Amount Date Particulars Amount
 30 Aug Purchases Return 54000

 Purchases Return A/c     

Date Particulars Amount Date Particulars Amount
31 Aug  Sundries as per Purchase Return Book 154000

 

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