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Purchase Books and Purchase Return Book by subsidiary books

Important information of Purchase Books

first :company purchased many items from many companies, but not all items can be purchased with cash Some items are credit

cash transaction ends immediately after the payment is made but the credit transaction It is not like that so the credit transaction documents should be kept safe till the payment

second The credit transaction recorded in the Subsidery book is repaid based on the FIFP (first in first paid) method
So asset Purchase transactions will not be recorded in this because the amount to be paid for the asset will be higher and Only short-term credit transactions are recorded .

third :agreement-based transactions are also credit transactions (bills payable,bills receivable)

Types purchased by the company

I Purchase return Book

Sometimes the purchased goods are substandard and damaged Those goods are return to supplier .Details of the goods to be returned are recorded in the purchase return book

Do not record the purchase return in the purchase account

for example, Purchased $100, Prchased return $15

  •   The closing balance of the purchased account is $ 85 which is incorrect
  •   Purchase account balance $100 Purchase return account balance $15 which is correct

The purchase return will be deducted from the purchase A/C in the trading account

Example of a bike manufacturing company

  1. investment $25000

  2. purchased 200 Wheel $ 5000 (on credit) from tkl Wheel manufacturer company

  3. purchased 400 Lighting (200 small Lighting $1000 and 200 medium Lighting $3000) $ 4000 (on credit) from ic Lighting manufacturer company

  4. purchased Nut bolt and Other iron parts $ 2500 (on credit) from iron manufacturer company

  5. purchased other rawmetirial $1800 on cash and The damaged material were returned $200

  6. The 12 damaged Wheel were returned to tkl Wheel manufacturer company

  7. damaged 10 small Lighting and 16 medium Lighting were returned to ic Lighting manufacturer company

  8. cash paid to iron manufacture company for purchase the material $500

  9. sales $18000 on cash

View the journal and ledger working file in pdf format

view PDF file

purchased books

I .tkl Wheel manufacturer company A/C
From Tkl Wheel
Manufacturer Company
per Wheel price is $25
Total Credit Purchases5000
discount allowed---
purchased Return (12*25=300)000/00|00 07-300
repaid to tkl Wheel manufacturer company ----
tkl Wheel manufacturer company total payment(creditors)4700

I . ic Lighting manufacturer company A/C
0/0/0purchased From ic Lighting manufacturer company 000/00|0005
200 Small Lighting $1000 per Lighting price $5 (1000/200=5) --2001000
200 Medium Lighting $3000 per Lighting price $15(3000/200=15)--2003000
Total Credit Purchases4000
discount allowed----
purchased Return000/00|00 07--
10 Small Lighting $5 (10*5=50) -1050
16 Medium Lighting $15 (16*15=240)--16240
repaid to ic Lighting manufacturer company ----
ic Lighting manufacturer company total payment(creditors)3710

I .Iron Manufacturer Company A/C
0/0/0Purchased Nut Bolt And Other Iron Parts From Iron Manufacturer Company 000/00|00 062500
total credit purchases2500
discount allowed - ---
purchased Return----
repaid to Iron Manufacturer Company --500
Iron Manufacturer Company total payment(creditors)2000

Information find out by ledger

creditors A/C
Tkl Wheel Manufacturer Company4700
Ic Lighting Manufacturer Company A/C3710
Iron Manufacturer Company A/C2000
total creditors10410

Information find out by subsidiary book

The Purchased and purchase return Book is prepared to find the credit transaction

total purchase =cash purchase + credit purchase (1800 + 11500+13300)

total purchased Return=cash purchased Return +credit purchased Return (590 + 200+790)

trial balance
Date Particular   debit   credit
  cash     40900 -
  capital - 25000
  purchase    13300 -
  purchase return     - 790
  creditors - 10410
  sales - 18000
54200 54200
trading & p/lA/C
purchase 13300 sales 18000
(-)purchase return790 1251018000
18000 18000

capital 25000by cash 40900
40900 40900


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