Class 11 Accountancy

Chapter - 12
Books of Original
Entry :
Special Purpose
Subsidiary Books
Non-cash transactions are recorded in
other special purpose subsidiary books,
which are as follows :
1) Purchase Book
2) Sales Book
3) Purchase Return Book
4) Sales Return Book
5) Bills Receivable Book
6) Bills Payable Book
7) Journal Proper
 All credit purchases of goods Purchase Book
are recorded in the purchase or Purchase
book. Journal
 For example a firm dealing in
cloth purchases cloth, it will be
treated as purchase of goods
and will be recorded in the
Purchase Book.
 Purchase book is also known as
‘Invoice Book’ or ‘Purchase Day
Book’.
Following transactions are not recorded in the purchase book :
1) Cash Purchases :
 Cash purchases are not recorded in this book since
these will be recorded in the cash book.

2) Purchase of Asset :
 Purchase of assets, such as Machinery, Furniture, Typewriters etc. are not
recorded in the purchase book. Instead these are recorded in the Journal
proper if purchased on credit or in the cash book if purchased for cash.

Recording of Transactions :
The source documents on the basis of which the
transactions are recorded in the purchase book re
invoices or bills received by the firm from the suppliers of the goods.
 FORMAT OF PURCHASE BOOK
Date Particulars (Name of Invoice L.F. Details Purchase Input CGST Input SGST Input Total
the Supplier) (Account No. IGST Amount
to be Credited)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

₹ ₹ ₹ ₹ ₹ ₹

Explanation of the columns of the purchase book :

1) Date : The date of the purchase of goods on credit is recorded in this column.
2) Particulars : The name of the person or firm from whom the goods are purchased is written in this column.
3) Invoice Number : The number of the invoice or bill on the basis of which the transaction is being
recorded in the purchase book is mentioned in this column.
4) Ledger Folio or L.F. : Page number of the ledger where the transaction is posted is recorded in this column.
5) Details : This column is used to write the individual amount of different items purchased from a particular supplier.
6) Purchase : Net amount of purchase i.e., purchase less trade discount is written in this column.
7) Input Central GST (CGST) : This tax is paid on intra-state purchase of goods i.e., purchase of goods within the same state.
8) Input State GST (SGST) : This Tax is also paid on purchase of goods within the same state.
9) Input Integrated GST (IGST) : This tax is paid on inter-state purchase of goods i.e., purchase of goods from outside the state.
10) Total Amount : Total amount of each transaction is shown in this column and the amount of each transaction is posted to the credit
of the Supplier A/c in the Ledger.
 Difference between
Purchase Book &
Purchase Account
 Purchase Book is a part of Journal, whereas
Purchase Account is the part of Ledger.
 There is difference in the format of
Purchase Book and Purchase Account.
Purchase Book is not divided into debit and
credit sides, whereas purchase account is
divided into debit and credit sides.
 Purchase Book records only credit
purchases of goods, whereas credit as well
as cash purchases of goods are posted in the
purchase account.
 Sales Book or Sales Journal
All credit sales of goods are recorded in the sale book. Sales Book is also called Sales Day Book.
Following Transactions are not recorded in the Sales Book :
1) Cash Sales
It does not record cash sales of goods, as the cash sales are recorded in the cash book.

2) Sale of Asset
Only the credit sale of goods is recorded in this book. Credit sale of an asset will
be recorded in Journal Proper, whereas cash sale of the asset will be recorded in cash book.

Recording of Transaction
Entries in the sales book are recorded on the basis of the sales
invoices issued by the firm to its customers at the time of sale.
 FORMAT OF SALES BOOK
Date Particulars (Name of Invoice L.F. Details Sale Output Output Output Total
the Customer) (Account No. CGST SGST IGST Amount
to be Debited)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
₹ ₹ ₹ ₹ ₹ ₹

Explanation of the columns of the purchase book :

1) Date : The date of the sale of goods on credit is recorded in this column.
2) Particulars : In addition to the name of the customer, this column also contains the description of goods sold, its quantity, rate, gross
amount, trade discount etc.
3) Invoice Number.
4) Ledger Folio or L.F.
5) Details : This column is used to write the individual items sold less trade discount. It is also
used to add the amount of Output CGST, Output SGST and Output IGST.
6) Sale : Net amount of sale i.e., sale less trade discount is written in this column.
7) Output Central GST (CGST) : A separate column is provided in the Sale Book to record Output CGST.
8) Output State GST (SGST) : A separate column is also provided in the Sale Book to record Output SGST.
9) Output Integrated GST (IGST) : A separate column is maintained to record Output IGST.
10) Total Amount : Total amount of each transaction is shown in this column and the amount of
each transaction is posted to the debit of the Customer’s A/c in the Ledger.
 Purchase Return Book or Purchase Return Journal
 This book is used to record the return of such goods as were purchased on credit basis. The book is also known as
Return Outward Book.
 There may be various reasons for returning the goods to the suppliers :
a) When the goods delivered are not according to the sample.
b) When the goods are not according to the order or the quality of the goods supplied in inferior.
c) When the goods are defective or they have been damaged in transit.
d) When the price charged in the invoice is in excess of the agreed price.
e) When the goods have not been delivered in time.
 When the goods are returned, a debit note is prepared and is sent to the supplier with the returned goods.
 It is called a debit note because the party’s account is debited with the amount written in this note.

FORMAT OF PURCHASE RETURN BOOK

Date Particulars (Name of Debit L.F. Details Purchase Input Input Input Total
the Supplier) Note Return CGST SGST IGST Amount
(Account to be No.
Debited)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
₹ ₹ ₹ ₹ ₹ ₹
 Sales Return Book or Sales Return Journal
 This book is used to record the return of such
goods as were sold to the customers on credit basis.
This book is also known as Return Inwards Book.
 When the goods are received back, a credit note
is prepared in duplicate and the original copy of
the same is sent to the party from whom goods were received.
Format of Sales Return Book :
Date Particulars (Name Credit L.F. Details Sales Output Output Output Total
of the Customer) Note Returns CGST SGST IGST Amount
(Account to be No.
Credited)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
₹ ₹ ₹ ₹ ₹ ₹
 Journal Proper or General Journal
After the sub-division of journal into various subsidiary books, journal remains only a
residuary book in which only those transactions are recorded which cannot be recorded
in any other subsidiary book. In such a case journal is called journal proper.

Following types of transactions are recorded in journal proper :

Opening Entry
This entry is passed to bring the closing balances of various assets, liabilities and capital appearing in the
Balance Sheet of previous accounting period, to the books of current accounting period.

Closing Entries
At the end of the accounting period, a Trading and Profit and Loss Account
has to be prepared to ascertain the net profit.

Transfer Entries
Transfer entries are passed for transferring an amount or the balance of one
account to another such as transferring the balance of Drawings A/c to Capital A/c.
 Adjustment Entries
At the time of preparation of final accounts, entries are needed to record certain unrecorded items such
as closing stock, outstanding expenses, prepaid expenses, depreciation on fixed assets, interest on capital
etc.

Rectifying Entries
These entries are passed to rectify the errors while journalizing, posting, totaling, balancing etc.

Miscellaneous Entries
In addition to the above, the following entries will also be passed in the journal proper :
a) Purchase of an asset on credit;
b) Sale of an asset on credit;
c) Writing off bad debts;
d) Discount allowed and discount received;
e) Bills Receivables received;
f) Bills payable issued
g) Endorsement of Bill Receivable to a creditor;
h) Dishonor of Bills Receivables (not discounted with the bank);
i) Cancellation of Bills Payable;
j) Goods taken by the proprietor for personal use;
k) Goods given away as charity or free sample;
l) Abnormal loss of stock or other assets by fire, accident, theft etc.