Purchase, Sales, and Return Books in Accounting

1. Introduction

Purchase, sales, and return books are important subsidiary books in accounting. They record specific types of business transactions to simplify the ledger preparation process.

2. Purchase Book

The purchase book is used to record credit purchases of goods or materials meant for resale or production.

Example:

Company ABC purchased the following items on credit from Supplier XYZ on 1st December 2024:

• 10 units of Product A at $50 each
• 20 units of Product B at $30 each

Journal Entry in Purchase Book:

3. Sales Book

The sales book records all credit sales of goods or materials intended for resale or production.

Example:

Company ABC sold the following items on credit to Customer LMN on 3rd December 2024:

• 5 units of Product A at $60 each
• 10 units of Product B at $35 each

Journal Entry in Sales Book:

4. Purchase Return Book

The purchase return book records goods returned to suppliers due to defects or other reasons.

Example:

On 5th December 2024, Company ABC returned 2 units of Product A to Supplier XYZ due to defects.

Journal Entry in Purchase Return Book:

5. Sales Return Book

The sales return book records goods returned by customers due to defects or other reasons.

Example:

On 7th December 2024, Customer LMN returned 1 unit of Product B due to incorrect delivery.

Journal Entry in Sales Return Book:

6. Summary

By maintaining purchase, sales, and return books, businesses can track transactions efficiently and accurately transfer data to the ledger. These records also assist in generating financial reports and ensuring accountability.