Page 83 - DCOM101_FINANCIAL_ACCOUNTING_I

Unit 8: Subsidiary Books

Inward Invoice No: This book contains the invoice number of the credit purchase of the goods Notes
from the supplier.
Amount (`): The book contains the value of credit purchase transactions from the supplier.
Steps involved in posting the entries:
1. Posting the entries pertaining to the individual accounts into the purchase journal.

2. The total of the purchase journal is determined monthly and finally should be posted into
debit side of the purchase account - to satisfy the rule of Real Account; which not only

contains the cash purchase but also the credit purchase of the firm during the year.
Illustration 1: From the following transactions of Ram for July,2003 prepare the Purchases Book
and ledger accounts connected with this book.
2003

July 5 Purchased on credit from Kannan & Co.
50 Iron boxes@ ` 500
10 Grinders@ ` 3,000
6 Purchased for cash from Siva & Bros.

25 Fans@ ` 1,250
10 Purchased from Balan & Sons on credit
20 Grinders@ ` 2,500
10 Mixie@ ` 3,000
20 Purchased, on credit, one Computer from Kumar for ` 35,000.
Solution:

In the books of Ram

Purchases Book
Date Particulars Inward Invoice No. L.F. Detail Total
` `
2003 Kannan & Co.
July 5 50 Iron boxes @ ` 500 25,000
10 Grinders @ ` 3,000 30,000
Goods purchased vide their
bill No....... Dated...... 55,000
July 10 Balan & Co.
20 Grinders @ `2,500 50,000
10 Mixie @ ` 3,000 30,000
Goods purchased vide their 80,000
bill No....... Dated......
Total 1,35,000

Ledger Accounts
Purchases Account

Dr. Cr.
Date Particulars J.F. Amount Date Particulars J.F. Amount
` `
2003 To Sundries as per
July 31 Purchases Book 1,35,000

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