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.
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
|
|
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, 40 tons of coal @ N30 per ton.
Jan 2- Sold to Roland Enterprises,
4 tons of coal @ N25 per ton.
Jan 3- Sold to Mr. Brown, 2
ton of coal @ N35 per ton.
Jan 4- Sold to Joyce Mart,
5 tons of coal @ N30 per ton.
Date
|
Particulars
|
F
|
Details
|
Total
|
Jan 1
|
Justin Trading Company
40 tons of coal @ N30 each.
|
1, 200
|
||
Jan 2
|
Roland Enterprises
4 tons of coal @ N25 each.
|
100
|
||
Jan 3
|
Mr. Brown
2 ton of coal @ N35 each.
|
70
|
||
Jan 4
|
Joyce Mart
5 tons of coal @ N30 each.
|
150
|
||
N 1, 520
|
NOTE: For example, Jan 1- Sold to Justin Trading
Company, 50 tons of coal @ N25 per ton.
Calculation- 1 ton
= N30
50 tons = 40 × 30
= N 1, 200.
This applies to all of such
questions.
LEDGER ENTRIES:
DR Sales
Account CR
JAN Sundries 1,520
DR Justin
Trading Company
Account CR
JAN 1 Sales 1,200
DR Roland
Enterprises
Account CR
JAN
2 Sales 100
DR Mr.
Brown’s
Account CR
JAN
3 Sales 70
DR Joyce
Mart’s
Account CR
JAN
4 Sales 150
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 D. Adam Ltd to cover an undercharge of N300 for
goods supplied by that firm.
II. A
Cheque for N 870 lodged with the bank was returned marked “Refer to Drawer”
III. Fred
sent a credit note to a customer.
IV. Goods
purchased amounted to N 7,800.
V. Sold
Goods on credit to Terry for N 2,400 Less 30% discount.
ANSWER:
I. Returns
Outwards.
II. Cash
Book.
III. Returns
Inwards.
IV. Purchases
Book.
V. Sales
Book.
This brings
us to the end of today's session, Questions on all we have done would be posted
next time so pls do go through thoroughly and understand cos questions are
coming to test your understanding of these topics. Hope this was very helpful
to you, leave a comment of what you think of this tutorial and your questions
below. Have a Blessed Day and Remember You are Amazing. God Bless.
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