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

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

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

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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

 

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