SUBSIDIARY BOOKS - A COMPARATIVE STUDY

PURCHASE PURCHASE RETURN SALES RETURN BILLS RECEIVABLES BILLS PAYABLES

PARAMETERS SALES BOOK/JOURNAL
BOOK/JOURNAL BOOK/JOURNAL BOOK/JOURNAL BOOK/JOURNAL BOOK/JOURNAL
This Subsidiary Book records
This Subsidiary Book records This Subsidiary Book records This Subsidiary Book records This Subsidiary Book records This Subsidiary Book records
1) Transaction all Return
all the CREDIT PURCHASE all the CREDIT SALES all Return Inward/Sales all the new Bills Received all the new Bills accepted by
Recorded Outward/Purchase Return
transactions. transactions. Return Transactions. (accepted by the Customers). us.
Transactions.

When goods purchased are When goods sold are not as

This Subsidiary Book does'nt This Subsidiary Book does'nt not as per specification, per specification, sample or Bills Drawn by our
Bills Drawn by us and
records CASH PURCHASES records CASH SALES because sample or are damaged and are damaged and when such Creditors/Suppliers and
2) Logic accepted by Customers are
because they are recorded in they are recorded in Cash when such goods are goods are returned by accepted by us are known as
known as Bills Receivables.
Cash Book. Book. returned, it is known as customer, it is known as Sales Bills Payables.
Purchase Return. Return.

Transactions in Purchase Transactions in Sales Book

Transactions in Purchase Transactions in Sales Return
3) Source Book are recorded on the are recorded on the basis of
Return Book are recorded Book are recorded on the Bills Receivables Bills Payables
Documents basis of Purchase Invoice, Sales Invoice, Outward
on the basis of Debit Note. basis of Credit Note.
Inward Invoice, Bill, etc. Invoice, Bill, etc.
Total of Purchase Book is Total of Purchase Return Total of Sales Return Book is Total of Bills Receivables Total of Bills Payables Book is
4) Posting to Total of Sales Book is posted
posted to Debit of Purchase Book is posted to Credit of posted to Debit of Sales Book is posted to Debit of posted to Credit Bills Payables
Ledger Account to Credit of Sales Account.
Account. Purchase Return Account. Return Account. Bills Receivables Account. Account.
a) Date a) Date a) Date a) Date
a) Date a) Date
b) Purchase Invoice No. b) Sales Invoice No. b) Debit Note No. b) Bills Payable No.
5) Columns in b) Credit Note No. b) Bills Receivable No.
c) Particulars (Name of c) Particulars (Name of c) Particulars (Name of c) Particulars
Subsidiary c) Particulars (Name of c) Particulars
Supplier) Customer) Supplier) (Creditor/Drawer)
Book Customer) (Customer/Drawee)
d) L/F d) L/F d) L/F d) L/F
d) L/F e) Amount d) L/F e) Amount
e) Amount e) Amount e) Amount e) Amount

SUBSIDIARY BOOKS - SPECIMEN

(a) (b) (c ) (d) (e)

DATE PARTICULARS L/F AMOUNT
Prepared by -
CA. CS. Anshul Agrawal
TOTAL
DEBIT NOTE
A Debit Note is a document issued by the Buyer to seller, when the buyer returns the goods
to the seller i.e. Purchase Return. Through this document, the Buyer i.e. Purchaser informs
the Seller that he (Buyer) has Debited his (Seller's) Account.

LOGIC:
a) When Goods are Purchased:
Purchases A/c ---------Dr.
To Seller's A/c

(In the above mentioned entry, the seller's account is Credited and hence the seller will
appear as 'Creditor' in buyer's Books of Accounts).

b) When Goods Purchased earlier are Returned back to Seller:

Seller's A/c ---------Dr.
To Purchase Return A/c

(In the above mentioned entry, the seller's account is Debited and hence the Debit Note is issued).

NOTE: When goods are purchased, Seller's A/c is Credited and it will appear as Sundry Creditor
in the buyer's Books of Accounts. Subsequently, when goods are returned, the amount
payable to seller is reduced to that extent. In order to inform the seller about such
accounting effect, Debit Note is issued while returning the goods.

CREDIT NOTE
A Credit Note is a document issued by the Seller to buyer, when the buyer returns the goods
to the seller i.e. Sales Return. Through this document, the Seller informs the Buyer that he
(Seller) has Credited his (Buyer's) Account.

LOGIC:
a) When Goods are Sold:
Buyer's A/c ---------Dr.
To Sales A/c

(In the above mentioned entry, the Buyer's account is Debited and hence the buyer will appear as
Debtor' in seller's Books of Accounts).
b) When Goods Sold earlier are Returned by Buyer:
Sales Return A/c ---------Dr.
To Buyer's A/c

(In the above mentioned entry, the Buyer's account is Credited and hence the Credit Note is issued).

NOTE: When goods are sold, Buyer's A/c is Debited and it will appear as Sundry Debtor in the Seller's
Books of Accounts. Subsequently, when goods are returned, the amount receivable from
buyer is reduced to that extent. In order to inform the buyer about such accounting effect,
Credit Note is issued while goods are returned.