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FINANCIAL ACCOUNT 101




                                    SUBSIDIARY BOOKS CONTD.

Hey Guys Welcome, hope you tried out what we learnt on your own? The key to being the best is practice, so practice as much as you can. Today we are going to continue from where we stopped Yesterday.
                    RETURNS INWARD JOURNAL.
It is otherwise called SALES RETURN JOURNAL, and is used to record goods previously sold but later returned to the supplier or seller by the customer, for wrong color, wrong type, inferior quality or breakage. In the Ledger the Returns inwards account is debited, while the customer’s account is credited. I t looks like this.
Date
Particulars
F
Details
Total
















                     RETURNS OUTWARD JOURNAL.
It is otherwise called PURCHASES RETURN JOURNAL, and is used to record goods returned to the supplier by a seller as a result of one reason or the other, like damages to the goods etc. In the
Ledger, the Returns outwards account is credited, while the suppliers account is debited. It looks like this.
Date
Particulars
F
Details
Total

















              CASHBOOK.
It is a double entry account used to record cash transactions and also transactions with the bank. It is a Subsidiary Book but it also plays the role of a Ledger. There are Two/Double Column Cashbook and Three Column Cashbook. Which we will treat later.
             JOURNAL PROPER.
This is another book of prime entry, in which the initial entries in chronological order are recorded. It is the daily record of transactions, used for opening entries and correcting errors.
              PETTY CASHBOOK.
This is a book for recording small expenses done on daily basis. This is where petty transactions are entered daily. This will be treated later on.
EXAMPLE 1:
Write up the sales day book of olojo from the following particulars
Jan 1- Sold to Justin Trading Company, 50 tons of coal @ N25 per ton.
Jan 2- Sold to Roland Enterprises, 3 tons of coal @ N22 per ton.
Jan 3- Sold to Mr. Brown, 1 ton of coal @ N30 per ton.
Jan 4- Sold to Joyce Mart, 4 tons of coal @ N28 per ton.
Date
Particulars
F
Details
Total
Jan 1
Justin Trading Company
50 tons of coal @ N25  each.

1, 250

Jan 2
Roland Enterprises
3 tons of coal @ N22 each.

66

Jan 3
Mr. Brown
1 ton of coal @ N30 each.

30

Jan 4
Joyce Mart
4 tons of coal @ N28 each.

112





N 1, 458

NOTE: For example, Jan 1- Sold to Justin Trading Company, 50 tons of coal @ N25 per ton.
Calculation-  1 ton = N25
                    50 tons = 50 × 25
                                  = N 1, 250.
This applies to all of such questions.
LEDGER ENTRIES:
    DR                    Sales Account                                 CR                                                                            JAN     Sundries     1,458                                                                   

DR                 Justin Trading Company Account          CR
JAN 1       Sales         1,250

DR                   Roland Enterprises Account                 CR             
JAN 2      Sales          66

DR               Mr. Brown’s Account                               CR
JAN 3     Sales           30

DR         Joyce Mart’s Account                                   CR
JAN 4     Sales          112

EXAMPLE 2:
Indicate which of the subsidiary books numbered 1-5 would be required for each of the transactions numbered I – V.
1.     Cashbook
2.     Purchases Book
3.     Sales Book
4.     Returns Inwards Book
5.     Return Outwards Book.

I.                   A Debit note was received from S. George Ltd to cover an undercharge of N280 for goods supplied by that firm.
II.                  A Cheque for N 800 lodged with the bank was returned marked “Refer to Drawer”
III.              Allen sent a credit note to a customer.
IV.              Goods purchased amounted to N 7,500.
V.                Sold Goods on credit to Kelvin for N 2,000 Less 20% discount.

ANSWER:
I.                   Returns Outwards.
II.                 Cash Book.
III.              Returns Inwards.
IV.              Purchases Book.
V.                Sales Book.

This concludes our session for today, Hope I Did justice to this topic. Pls for your questions send me an email to- dividiamond@gmail.com. Until we meet again, remain blessed.

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