Explain Purchase Book and Sales Book?

Purchases Book:

Purchases Book (also known as Invoice Book or Purchases Journal or Purchases Day Book) is one of the subsidiary books which is used for the purpose of recording the merchandise the enterprise deals in on credit. In other words, in this book credit: purchase of goods meant for ye sale are recorded. It records neither the case purchases of the merchandise nor the purchase of any asset other than the merchandise.

The source documents for recording entries in the Purchase Book are invoices or bills received from the suppliers of goods. The entries are Made with the net amount of the invoice after deducting trade discount/quantity discount. In the Particulars, column name :of the supplier is written, particulars and quantity of goods purchased are also recorded by way Of narration.

Purchase book

Posting of Individual Amount : Individual amounts are daily posted to the credit of Suppliers’ Accounts by writing ‘By Purchases A/c’ in the particulars column.

Posting of Periodic Total: Periodic total is posted to the debit of Purchases Account by writing ‘To Sundries as per Purchases Book’ in the’ particulars column.

Sales Book: Sales Book (also known as Sales Day Book or Sales Journal) is one of the subsidiary books which is used for the purpose of recording the sale of merchandise (goods purchased for resale) on credit. It records neither the cash sale of the merchandise nor sale of any asset other than merchandise.

The source documents for recording entries in the sales book are the invoice or bills issued to customers.

The entries are made with the net amount of the invoice after deducting trade discount quantity discount. Entries in the Sales Book are made in the similar manner as is done in the Purchases Book. In the ‘Particulars’ Column name of the customers to whom goods are sold on credit are recorded. Particulars and quantity of the goods sold are also recorded by way of narration.

The simplest format of the sales book is given below:

Sale book
  • Posting from the Sales Book. The individual entries and the total of the book are posted into the ledger as under .
  • Posting of Individual Amount: Individual amounts are daily posted to the debit of Customers’ Accounts by writing ‘To Sales A/c’ in the particular column.
  • Posting of Periodic Total: Periodic total is posted to the credit of Sales Account by writing ‘By Sundries as per Sales Book’ in the particulars column.

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