GOODS
JOURNAL
GOODS JOURNAL
It is divided in to (i) Purchase Book (ii) Sales Book
(iii) Purchase Return Book & (iv) Sales Return Book.
It is also known as proper subsidiary book. To
record a transaction in the proper subsidiary books
the main conditions are.
i. It should be a credit transactions.
ii. It should be a transaction of goods.
GOODS JOURNAL CONT….
If only one condition is satisfied, then that transaction
cannot be entered in Goods Journal.
Both the conditions should be satisfied to enter a
transaction in the proper subsidiary books.
Example:
i. Goods sold to Mahesh & cash received (Here it is a
goods transaction; but it is not a credit transaction)
GOODS JOURNAL CONT….
i. Purchased Plant & Machinery from Kamesh on
credit (This is a credit transaction, but it is not
relating to goods)
ii. Furniture sold to Haresh on cash basis. (It is
neither a credit transaction nor relating to goods)
PURCHASE JOURNAL
Purchase Book/ Purchase Day book
This is the book of prime entry which records all
transactions of credit purchases of goods. Furniture
or Machinery purchases on credit or goods
purchase for cash etc. are not entered in the
purchase book. This book is maintained mainly to
record credit purchases of goods in business
PURCHASES JOURNAL CONT….
A transaction to find place in purchase book
must comply two necessary conditions,
i. It should be credit transactions,
ii. It must involve purchase of “Goods” only. Cash
purchases of goods are recorded in the Cash Book.
Credit purchase of assets are recorded in the Journal
proper.
PURCHASES JOURNAL CONT…
A purchase Book is also known as purchase
journal, Invoice book, Purchase Register, Bought
Book, Purchase Day Book etc.
The amount of trade discount is deducted from
the invoice itself. Therefore, a trade discount does
not appear in the purchase book. Only the net
value is recorded in the purchase Book.
PURCHASE JOURNAL CONT……
EXAMPLE ONE.
Recorded the following transactions in the purchase Book of
Mr. Mussa 2021 Jan, post them in the ledger.
1st Bought goods from Ramnik & Co. of Tsh 800.
2nd Purchased one Fan for office use from Ignasio Traders of
Tsh 1,200
8th Superdoll & Co. invoiced goods to us of Tsh 1,000
10th Cash purchases of Tsh 300.
11th Rajesh sold goods to us Tsh 1,350.
12th Purchase goods from Jayesh of Tsh 1,400 in exchange of
furniture of the same amount.
th
SALES JOURNAL
• Sales Book / Sales day book
• This is the book of prime entry which records all
transaction of credit sales of goods. Sale of old
machinery on credit or goods sold on cash basis
etc. are not entered (recorded) in the sales Book.
Sales book is maintained to record all credit sales
of goods.
SALES JOURNAL CONT…
• Sales Book must comply with two conditions.
• The transaction must be a credit transaction.
• It must involve sale of “goods” kept in business for
resale purpose. Cash sales of goods are recorded in
the Cash Book, while Credit Sale of assets are
recorded in the Journal Proper.
SALES JOURNAL CONT…..
A sales Book is also known as Sales Journal, Sales
Register, Sales Day Book, sold Book etc.
EXAMPLE TWO.
Record the following transactions in the Sales Book of
Mr. Rajput from 2020 Sept and post them to ledger
accounts.
1st Sold goods to Rajesh Bros. Tsh 1,500
5th Goods sold to Prakash Stores on cash basis Tsh
1,000
8th Supplied Goods to Paul & Co. Tsh 1,200
12th Sold old typewrite to ABC Co. Ltd. Tsh 2,000
15th Invoiced goods to Preta & Co. Tsh 1,800
PURCHASE RETURN BOOK
Purchase Return Book
This is the book of prime entry which records all
returns of goods purchased on credit. In this book,
all the transactions of return of goods purchased
on credit are recorded. A transaction of a return of
assets will not come in the purchase Return Book.
PURCHASE RETURN BOOK CONT….
A Purchase return Book is also known as Purchase Return
Journal or Return Outward Book. The goods purchased may
be returned for one or two of the following reasons:
If the goods supplied are not as per the sample/order.
If the goods are in excess of the requirements.
If the goods are damaged in transit.
If the supply of goods is delayed.
If the goods are of different designs & colour.
If the goods supplied are of inferior quantity.
PURCHASE RETURN BOOK CONT….
EXAMPLE THREE.
Record the following transactions in Purchase Return
Book of Emmanuel & Company from 2022 Feb, and post
them to ledger.
1st Returned goods to Reema & Co. Tsh 700.
4th Keisha Stores received goods returned by us Tsh 500.
10th Machine costing Tsh 4,000 Returned to Ms. Neema
Engineering Work because it is not working well.
PURCHASE RETURN BOOK CONT….
18th Returned goods to Kanta Stores as they were
defective of Tsh 200.
25th Sent debit note to Reshma & Co. of Tsh 400
for goods returned.
28th Returned goods to Tanata stores of Tsh 300 as
it was defective and received cash for it.
SALES RETURN BOOK
Sales Return Book
This is the book of prime entry which records all
returns of goods sold on credit. A transaction of
return of assets will not come in the Sales Return
Book. Sales Return means goods sold by a supplier
are returned by a Customer.
SALES RETURN BOOK CONT….
A Sales Return Book is also known as Sales
Return Journal or Return Inward Book. Goods sold
to customers may be returned by them if the
goods supplied to them are not up to the sample
or of inferior quality or damaged etc.
SALES RETURN BOOK CONT….
EXAMPLE FOUR
Record the following transactions in the Sales
Return Book frm 2019 March & post them to
ledger.
1st Baraka returned goods to us of Tsh 200.
5th Goods returned to us by Karimu of Tsh 300 and
paid cash for it.
12th Mayasa returned goods of Tsh 250.
SALES RETURN BOOK CONT….
16th Goods sold to Rajesh is defective therefore
returned from Rajesh goods of Tsh 400.
25th Sent credit note to Rajabu of Tsh 450 for
goods returned by him.
30th Received Debit note from Adela of Tsh 500 for
goods returned by him.
EXAMPLE FIVE
Record the following transactions in Sales Book,
Purchase Book & Return Book of Shri Tara Chand For
April 2014,
1st Purchased goods of Tsh 7,000 from Sajeed Tsh
3rd Sold goods to Amit Traders for Tsh 3,500
5th Sold goods to Sangam Bazar for Tsh 2,000.
6th Purchased goods worth Tsh 5,000 from Arihant &
Co.
7th Sangam Bazar returned goods worth Tsh 500
10th Returned goods worth Tsh 500 to Sajeed
12th Sold goods to Anmol Stores for Tsh 500
14th Anmol Stores returned goods worth Tsh 100
17th Purchased Furniture worth Tsh 750 for office from
Star Furniture Mart
18th Sold goods to Narayan General Stores for Tsh
1,000 & purchased from them goods worth Tsh 200
25th Sold goods worth Tsh 400 to Dev & Co.
27th Sold old typewriter to Ashok Bros. for Tsh 1,000.
30th Purchased goods worth Tsh 3,000 from Patil
Stores & asked them to deliver these goods to Akshay
Stores. Sales for Tsh 3,500 was sent to Akshay Stores.
EXAMPLE SIX
From following instruction prepare Subsidiary books of
goods for Jackson Traders. 2014 July
1st Purchased from Patrick & Co. goods at price of Tsh
2,255
4th Sold old machinery for Tsh 3,000 to Kart works.
7th Returned goods by Pamelah Stores of Tsh 800
8th Goods sold to Mr. Manek worth Tsh 10,000
10th Returned goods worth Tsh 600 to Pamelah & Co.
12th Goods sold by Keshav chanda & Co. to us of
Tsh 10,000
14th Sent goods to Mayank Traders for goods
supplied of Tsh 8,000
16th Sagar & Co. supplied goods to us of
Catalogue price of Tsh 6,000
18th Despatched goods worth Tsh 5,000 to Mangal
Stores
20th Received an order from Ms Kanji Stores for
goods worth Tsh 3,000.
CASH BOOK
Cash book is a Subsidiary Book or a book of
original entry meant for the recording of all
receipts & payments of cash. All cash transactions
are recorded in the cash book. Credit transactions
are not recorded in cash book.
Thus, it can be said that cash book serves dual
purpose of journal as well as ledger. Hence the
cash book is considered as a combination of
journal & Ledger.
CASH BOOK CONT….
Types of Cash Book (Detail)
Single column Cash book/Simple Cash book (Cash
column only)
Double (Two) column cash book (Cash Book with
Cash & Bank columns)
Three column cash book
CASH BOOK CONT….
EXAMPLE SIX
Enter the following transactions in the single
column cash book of Gopichand. March, 2014 `
1st Commenced business with cash 20,000
2nd Bought goods for cash 5,000
3rd Sold goods for cash 4,000
4th Goods purchased from Ravi Kumar 10,000 on
credit
10th Paid to Ravi Kumar 7,000
14th Cash sales 8.000
CASH BOOK CONT….
18th Purchased furniture for office 4.000
22nd Paid wages 500
25th Paid rent 600
30th Received commission 4.000
30th Withdrew for personal purpose 1.000
31st Paid salary 900
CASH BOOK CONT….
EXAMPLE SEVEN
Record the following transactions in two column cash book
(Cash and Bank) in the books of Soft Silk Co. for the month of
July, 2014. Find out the closing balances for the month of July
2014.
1st Opening balance b/d (Cash) 14,500
Opening balance b/d (Bank) 7,000
4th Cash purchases Tsh 6,700
5th Rent for June month paid by cheque Tsh 2,500
9th Cash sales Tsh15,200
12th Dividend paid by cheque Tsh 4,350
CASH BOOK CONT….
15th Cash deposited into bank Tsh 5,000
18th Cash paid to Rahim & Bros to settle his account Tsh 10,000
20th Repairs paid Tsh 1,000
22nd Commission paid by cheque Tsh 2,000
23rd Customer, Deepak remitted to our bank account Tsh 20,000
25th Cash withdrawn from bank for office use Tsh 5,000
27th Drawings made from business cash for personal purpose Tsh
2,000
28th Purchased stationery by cash Tsh 3,000
30th Cash withdrawn for personal use from bank Tsh 1,400
