Purchase book | Purchase Account | Subsidiary Book

 

Purchase Book and Purchase Account in Subsidiary Books

Purchase may be in cash or credit.

Goods purchases in cash are recorded in cash book.

All the credit purchases of goods are recorded in purchase book.

This book does not record any purchase of fixed assets and goods purchase in cash.

This book considers only the credit purchases of goods dealt in.

This book must fulfill these conditions:

The transaction must be on credit purchase.

The purchase must be of goods-in-trade.

The primary document for a purchase book is a purchase invoice.

The sales invoice given by the seller.

In-fact, this sales invoice is purchase invoice for purchaser.

Other documents for the purchaser are advice note and delivery note.

Purchase Book

Date	Particulars	Invoice No.	LF	Amount	Amount
Total creditors					xxxx

 

Keep in Mind (KIM)

Different organization has different needs. Organizations prepare format according to their need. Format used for subsidiary book are general format.

 

PROBLEM: 1

Following extracted data are given by YK Traders:

July 2:        Net purchased from TR Thapa Rs 7,000.          (Invoice No. 25; LF PL 30)

July 5:        Net purchased from SK Sharma Rs 17,000.     (Invoice No. 30; LF PL 25)

July 7:        Net purchased from BB Gurung Rs 27,000.     (Invoice No. 35; LF PL 02)

July 9:        Net purchased from PP Aryal Rs 15,000.         (Invoice No. 40; LF PL 09)

Required: (a) Purchase book; (b) Purchase account; (c) TR Thapa’s account  

[Answer: Total creditors = Rs 66,000]

SOLUTION:

Purchase Book

Date	Particulars	Invoice No.	LF	Amount	Amount
July 2 July 5 July 7 July 9	Purchased from TR Thapa Purchased from SK Sharma Purchased from BB Gurung Purchased from PP Aryal	25 30 35 40	PL 30 PL 25 PL 02 PL 09		7,000 17,000 27,000 15,000
Total creditors					66,000

 

 

POSTING PURCHASE BOOK INTO PURCHASE ACCOUNT

After preparing purchase book, creditors or suppliers are recorded in purchase account.

There is a separate purchase ledger to record the creditors or suppliers.

The credit purchases are posted, one-by-one to the debit side purchase account.

It is credited into creditors account.

Purchase Account

Dr							Cr
Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
July 2 July 5 July 7 July 9	To TR Thapa’s account To SK Sharma’s account To BB Gurung’s account To PP Aryal’s account	PL 30 PL 25 PL 02 PL 09	7,000 17,000 27,000 15,000	July 9	By Balance c/d		66,000
			66,000				66,000

Keep in Mind (KIM)

Purchase account        Dr  7,000         To TR Thapa’s account                      7,000 Here, Purchase is in debit side, so all creditors are recorded in debit side. But creditors are recorded in credit side when creditors account is prepared.

TR Thapa’s Account

Dr							Cr
Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
July 2	To Balance b/d		7,000	July 2	By Purchase account		67,000
			7,000				7,000

 

###########

Click on link for YouTube videos

 

ACCOUNTING EQUATION http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz

LEDGER http://tiny.cc/haakkz

SUBSIDIARY BOOK http://tiny.cc/399jkz

CASH BOOK http://tiny.cc/889jkz

TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz

GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

 

###########

PROBLEM: 2

Following transactions are given by PK Furniture House:

5 April:  Purchase from Bagmati Plastic Industries:

25 chairs @ Rs 400 per unit

20 stools @ Rs 200 per unit

5 tables @ Rs 1,000 per unit

Less: Trade discount @ 12%)

10 April: Purchased from MK Furniture for cash:

3 sofas sets @ Rs 12,000 per set (10% cash discount)

15 April: Purchased from Himal Traders

5 computer tables @ Rs 3,000 per unit

4 reading tables @ 4,000 per set (less 10% trade discount)

Required: (a) Purchase Book; (b) Purchase Account; (c) Creditors account

[Answer: Purchase book = Rs 46,120; Purchase account = Rs 78,520]

SOLUTION:

Purchase Book

Date	Particulars	Invoice No.	LF	Amount	Amount
April 5	Purchased from Bagmati Plastic Industries: 25 chairs @ Rs 400 per unit 20 stools @ Rs 200 per unit 5 tables @ Rs 1,000 per unit Total Less: Trade discount (19,000 @ 12%)			10,000 4,000 5,000	16,720
				19,000 (2,280)
April 15	Purchased from Himal Traders: 5 computer tables @ Rs 3,000 per unit 4 reading tables @ Rs 4,000 per unit Less: Trade discount (16,000 @ 10%)			15,000 16,000 (1,600)	29,400
Total creditors					46,120

Keep in Mind (KIM)

When discount rate is given below the items, it is applied for all items (see April 5) When discount rate is given in same line, it is applied only for bracket item (see April 15) In subsidiary book, we do not record cash transaction. (see April 10) Cash transaction is recorded in purchase account.

 

Purchase Account

Dr							Cr
Date	Particulars	LF	Amount	Date	Particulars	LF	Amount
April 5 April 10 April 15	To Bagmati Plastic Indus. To Cash account To Himal Traders		16,720 32,400 29,400	April 15	By Balance c/d		78,520
			78,520				78,520

 

Cash purchase   (3 x Rs 12,000)     = 36,000 – 36,000 @10% discount = 32,400

Bagmati Plastic Industries Account  

Dr							Cr
Date	Particulars                 .	LF	Amount	Date	Particulars	LF	Amount
April 5	To Balance c/d		16,720	April 5	By Purchase account		16,720
			16,720				16,720

Himal Traders Account

Dr							Cr
Date	Particulars            .	LF	Amount	Date	Particulars	LF	Amount
April 15	To Balance c/d		29,400	April 15	By Purchase account		29,400
			29,400				29,400

********

PROBLEMS  AND  ANSWERS  OF  PURCHASE  BOOK

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

Basic Problem: 1          Purchase Books

Following extracted transactions are given by Kalika Furniture House:

5 April: Purchase on credit from Bagmati Plastic Industries:

                   25 chairs @ Rs 350 per unit

                   20 stool @ Rs 200 per unit

11 April: Purchased from MK Furniture for cash

                   2 sofas sets @ Rs 12,000 per set (10% cash discount)

15 April: Purchased on credit from Himal Furnishing House:

                   10 computer tables @ Rs 4,000 per unit

                   5 reading tables @ 5,000 per set

                   (Less 15% trade discount)                

Required: (a) Purchase book; (b) Purchase account

[Answer: (a) Total creditors = 68,000; (b) Purchase A/c = 89,600]

Basic Problem: 2          Purchase Books

Arun Books Centre has following extracted data:

Mar 10:  Purchased books on credit from EP Publication:

                       25 pieces of Accountancy Rs 550 each

                       15 pieces of Business Studies Rs 300 each

                       20 pieces of Economics Rs 250 each

                       (20% trade discount)

Mar 15: Purchased books on net cash from Shubharambha Publication:

                       10 pieces Compulsory English Rs 250 each

                       20 pieces Compulsory Nepali Rs 200 each

Mar 20: Purchased book on credit from Binita Book House:

                       15 pieces English Dictionary @ Rs 750 each (12% trade discount)

                       10 pieces binding tape @ Rs 65 each

Required:  (a) Purchase Book; (b) EP Publication account

[Answer: (a) Total creditors = 29,150; (b) Purchase A/c = 35,650]

***********

Thank for investing your time.

Please comment on article..

You can help me by sharing this article at your social media platform.

Jay Google, Jay YouTube, Jay Social Media

जय गूगल, जय युट्युब, जय सोशल मीडिया