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.
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.
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