Sales Book and Sales Return Book

Sales are a very important aspect of all organizations. Depending on the size of the organization there could be dozens to thousands of sales per day. And so it makes sense to maintain a separate sales book and sales return book. Let us take a look.

Sales Book

A Sales Book is a Subsidiary Book and is, therefore, also a book of Original Entry. A Sales Book or Sales Day Book contains the records of all-credit sales of goods. While a Cash Book holds the records of all-cash sales of goods.

We don’t keep record sold assets in the Sales Book. One records that in Journal Proper. We record entries from Source Documents in the Sales Book. Source Documents are Invoices or bills received from the suppliers of goods.

The entries in the Sales Book are also made with the net amount of the invoice. Therefore, Sales Book does not contain a Trade Discount and other details are given on the invoice.

Every month the total of the Sales Book is posted on the Credit side of the Sales A/c. Sales A/c is a ledger A/c. However, the individual accounts of the customers can be posted daily. Also, where the volume of transactions is too large, the entries in the Sales A/c can be posted weekly or fortnightly.

The seller prepares the invoice in two or more copies. The invoice contains the details about the sales, the terms of payment, etc.  Given below is the Performa of the Sales Book

Browse more Topics under Subsidiary Books

• Introduction to Subsidiary Books
• Purchase Book and Purchase Return Book

Sales Book

Date	Invoice No.	Name of the Customer	L.F.	Amount

Sales Return Book

Sometimes, goods sold can be defective or of low quality, etc. and hence, the customer may return them. Thus, goods sold that are returned by the customer or buyer, are recorded in the Sales Return Book. It is noteworthy that the return of only those goods is entered in these books that were earlier sold on credit.

A Credit Note is prepared for every return of goods. It is prepared in duplicate. The Credit Note contains the name of the customer, details of goods returned and reason thereof. Each Credit Note is dated and serially numbered. The Credit Note serves as the source document for entries in the Sales Return Book.

The customer to whom the goods were sold may also prepare a Debit Note. It is prepared when goods are returned to the seller and is therefore sent to him. Given below is the Performa of the Sales Return Book:

Sales Return Book

Date	Credit Note No.	Name of the Customer	L.F.	Amount

Solved Example For You

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

Date	Details
10 Aug	Sold to A Ltd. (Invoice No. 24): 2000 shirts @ ₹ 500 per piece.
16 Aug	Sold to B Ltd. (Invoice No. 26): 100 ties @ ₹ 200 per piece. Trade discount 20%
18 Aug	Sold to C Ltd. (Invoice No. 28): 50 coats for ₹100000. Trade discount 10%
21 Aug	Sold to D Ltd. (Invoice No. 30): 100 trousers @ ₹ 400 per piece. Trade discount 15%
25 Aug	Sold to E Ltd. (Invoice No. 33): 50 ties @ ₹ 250 per piece. Trade discount 10%

Ans. In the Books of M/s. M and Co.(Below are entries when recorded in the sales book will look like)

Sales book

Date	Invoice No.	Name of the Customer	L.F.	Amount
10 Aug	24	A Ltd.		1000000
		2000 shirts @ ₹ 500 per piece
16 Aug	26	B Ltd.		16000
		100 ties @ ₹ 200 per piece.   = 20,000
		Less: 20% T.D.                       =   4,000
18 Aug	28	C Ltd.		90000
		50 coats @ ₹ 2,000 per piece    = 100000
		Less: 10% T.D.                          =   10000
21 Aug	30	D Ltd.		32000
		100 trousers @ ₹ 400 per piece = 40,000
		Less: 15% T.D.                          = 6,000
25 Aug	33	E Ltd.		11250
		50 ties @ ₹ 250 per piece         = 12,500
		Less: 10% T.D.                         = 1,250
31 Aug		Total		1149250

(Entries, when recorded in the books of individual traders will look like the below entries)

A Ltd. A/c                                                   

Date	Particulars	Amount		Date	Particulars	Amount
10 Aug	To Sales	1000000

B Ltd. A/c                                                                   

Date	Particulars	Amount		Date	Particulars	Amount
16 Aug	To Sales	16000

C Ltd. A/c                                                                                                                           

Date	Particulars	Amount		Date	Particulars	Amount
18 Aug	To Sales	90000

D Ltd. A/c 

Date	Particulars	Amount		Date	Particulars	Amount
21 Aug	To Sales	32000

E Ltd. A/c     

Date	Particulars	Amount		Date	Particulars	Amount
25 Aug	To Sales	11250

Sales A/c     

Date	Particulars	Amount		Date	Particulars	Amount
				31 Aug	Sundries as per Sales Book	1149250

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

Date	Details
5 Aug	Goods returned by M Ltd. (Credit Note No. 2): 2 bags @ ₹ 500 per piece.
11 Aug	Goods returned by D Ltd. (Credit Note No. 3): 10 suitcases @ ₹ 2500 per piece. Trade discount 20%
28 Aug	Goods returned by X Ltd. (Credit Note No. 5): 5 duffle bags for ₹5000. Trade discount 10%

Ans.In the Books of M/s. Z and Co.(Below are entries when recorded in the sales return book will look like)

 Sales Return Book

Date	Credit Note No.	Name of the Customer	L.F.	Amount
5 Aug	2	M Ltd.		1000
		2 bags @ ₹ 500 per piece.
11 Aug	3	D Ltd.		20000
		10 suitcases @₹ 2500 per piece          = 25000
		Less: 20% T.D.                                    = 5000
28 Aug	5	X Ltd.		4500
		5 duffle bags @ ₹1000 per piece           = 5000
		Less: 10% T.D.                                      = 500
31 Aug		Total		25500

(Entries, when recorded in the books of individual traders will look like the below entries)

MNC Ltd. A/c

Date	Particulars	Amount		Date	Particulars	Amount
				5 Aug	By Sales Return	1000

D Ltd. A/c   

Date	Particulars	Amount		Date	Particulars	Amount
				11 Aug	By Sales Return	20000

 X Ltd. A/c           

Date	Particulars	Amount		Date	Particulars	Amount
				28 Aug	By Sales Return	4500

 Sales Return A/c 

Date	Particulars	Amount		Date	Particulars	Amount
31 Aug	Sundries as per Sales Return Book	25500