Sales Book | Sales Account | Invoice | Advise Note | Delivery Note

 

Sales book and Sales Account in Subsidiary Books

Sales may be in cash or credit.

Goods sales in cash are recorded in cash book.

All the credit sales of goods are recorded in sales book.

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

This book is the most important under subsidiary journals. 

To record in this book, there must be following conditions:

The transaction must be on credit sale,

The sale must be about goods-in-trade.

For every credit sale, the seller sends a document to the buyer.

It shows full details of the goods sold and the prices of the goods.

This particular document is known as an invoice. For the seller, it is sales invoice.

For the buyer, it is the purchase invoice.

The seller will keep one or more copies of each sales invoice for reference use.

Three copies of an invoice to be made, which are to be used as follows:

Sent to the buyer.

To be filed separately and produced when asked by the Inland Revenue Department.

Retained by the seller for reference.

 

PROBLEM: 3

Kedar Oil (P) Ltd, Rupandehi has following information (PAN No. 567891234):

        Sold to DK Traders, Jamal, Kathmandu (Order No. 567/19, PAN No. 023456789):

        30 cartoons soya bean oil, each cartoon contains 10 liters @ Rs 125 per liter.

        10 tins mustard oil, each tin contains 15 liters @ Rs 130 per liter.

Business terms:

        Trade discount @ 10%.

        Value added tax (VAT) applicable @ 13%.

        Condition of sales: 2/30, net 60

Required: (a) Invoice; (b) Advice notes; (c) Delivery note

[Answer: Total amount = 57,969]

SOLUTION:

 

The general format of an Invoice is as follows:

Invoice No: 4321
PAN No. 567891234		Kedar Oils (P) Ltd Galla Mandi, Bhairahawa, Rupandehi Phone No: 071-567899     Fax: + 977-071-567900
To,				Dated: 10 September 2019
DK Traders, Jamal, Kathmandu.				Your Order No:        567/19
Phone: 01 ̶  456789				Despatch Details: 30 cartoons and 5 tins
PAN No. 023456789
SN	Description		Quantity			Rate	Amount
1	30 cartoons soya bean  oil		300 liters			125 per liter	37,500 19,500
2	10 tins mustard oil		150 liters			130 per liter
							57,000 − 5,700
10 % Discount
Net amount for tax							51,300  + 6,669
VAT 13%
Total amount							57,969
Amount in words:
Fifty seven thousand nine hindered sixty nine.					Jay Gupta
Condition of sales: 2/30, net 60					Authorized Signature
Errors and Omissions Expected (E&OE)

 Keep in Mind (KIM)

Practically, sales invoice are prepared in many copies. It may be in three to six copies. The number depends on the policy of organization. If a business uses the invoice as the advice note and the delivery note, there may be six copies. Three to four copies are normal. The first copy is sent to the customer. The second copy is sent to the accounts department, the third to the sales department and the fourth one is filed separately when required by the concerned government office.

 

###########

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

 

###########

 

DOCUMENTS REQUIRED FOR CREDIT SALE

Apart from the sales invoice, there are other documents prepared by the seller at the time of sale.

These documents are (a) Advice notes (b) Delivery note

ADVICE NOTE

It is a note, sent to the customer before the goods are dispatched.

This note is especially sent to the customer to inform that goods are on-the-way.

If goods do not reach within normal delivery time, then the customer can notify to the seller. In this condition, enquiries may be made with the transporter about what happened to the goods.

 

The general format of an Advice Note is as follows:

Advice Note No: 1234
Kedar Oils (P) Ltd Galla Mandi, Bhairahawa, Rupandehi Phone No: 071-567XXX     Fax: + 977-071-567XX0
To,			Dated: 10 September 2019
DK Traders,			Your Order No:        567/19
Jamal, Kathmandu.			Despatch Details: 30 cartoons and 5 tins
Phone: 01 ̶  456XXX
SN	Description		Quantity	Rate	Amount
1	30 cartoons soya bean  oil		300 liters	125 per liter	37,500 19,500
2	10 tin mustard oil		150 liters	130 per liter
					57,000 − 5,700
10 % Discount
Net amount for tax					51,300  + 6,669
VAT 13%
Total amount					57,969
Delivery to:
DK Traders		Jay Gupta
Jamal, Kathmandu		Authorized Signature

 

DELIVERY NOTE

This is an additional note of the goods.

This is sent to the customer with transport so that the goods can be checked immediately and verified.

In normal practice, transporter retains a copy of the delivery note after getting it signed by the customer or his authorized person.

It shows that goods have been received by customer.

The general format of Delivery Note is as follows:

Delivery Note
Kedar Oils (P) Ltd Galla Mandi, Bhairahawa, Rupandehi Phone No: 071-567XXX     Fax: + 977-071-567XXX
To,		Dated: 11 September 2019
MK Traders,		Your Order No:      567/19
Jamal, Kathmandu.		Despatch Details: 30 cartoons and 5 tins
Phone: 01 ̶  456XXX		Delivered by: Shiv Transport
SN	Description			Quantity
1	30 cartoons soya bean  oil			300 liters
2	10 tin mustard oil			150 liters
Delivery to:
DK Traders			Jay Gupta
Jamal, Kathmandu			Authorized Signatory
Received: 30 cartoons and 10 tins Dated: 15 September 2019   Dinesh Sharma (on behalf of DK Traders)

PROBLEM: 4

Max Distributors provides you following transaction:

March 1, Credit sold to Ramesh Bros:

               10 dozen close-up toothpaste @ Rs 30 per piece

               10 dozen Vaseline body lotions Rs 1,100 per dozen

               Less:  trade discount 10%

March 5, Credit sold to Ashmita Cosmetics:

               15 bottle shaving foam @ Rs 180 per bottle.

               2 dozen talcum powder @ Rs 85 per piece (trade discount @ 8%)

March 8, Sold to YB Traders for cash:

               2 dozen shampoo @ Rs 100 per bottle

Required: (a) Sales book; (b) Sales account; (c) Debtors account

[Answer: (a) 20,049; (b) 22,449; (c) 20,449]

SOLUTION:

Sales Book

Date	Particulars	Invoice No.	LF	Amount	Amount
March 1	Sold to Ramesh Bros: 10 dozen close-up toothpaste @ Rs 60 per unit 10 dozen Vaseline body lotion @ Rs 1,100 per dozen  Total Less: Trade discount (18,200 @ 10%)			7,200 11,000	16,380
				18,200 (1,820)
March 5	Sold to Ashmita Cosmetics: 15 cans shaving foam @ Rs 180 per can 1 dozen talcum powder @ Rs 85 per piece Less: Trade discount (1,020 @ 5%)			2,700 1,020 (51)	3,669
Total creditors					20,049

Keep in Mind (KIM)

When discount rate is given below the items, it is applied for all items (see March 1) When discount rate is given in same line, it is applied only for bracket item (see March 5) In subsidiary book, we do not record cash transaction. (see March 8) Cash transaction is recorded in sales account.

 

POSTING SALES BOOK INTO SALES ACCOUNT

After preparing sales book, debtors or customers are recorded in sales account.

There is a separate sales ledger to record the debtors or customers.

The credit sales are posted, one-by-one to the credit side sales account.

It is debited into debtors account.

Sales Account

Dr							Cr
Date	Particulars            .	LF	Amount	Date	Particulars	LF	Amount
March 8	To Balance c/d		22,449	March 1 March 5 March 8	By Ramesh Bros By Ashmita Cosmetics By Cash account		16,380 3,669 2,400
			22,449				22,449

Cash sales (2 x 12 x Rs 100)   = Rs 2,400

Debtor Account

Dr							Cr
Date	Particulars            .	LF	Amount	Date	Particulars	LF	Amount
March 1 March 8	To Ramesh Bros To Ashmita Cosmetics		16,380 3,669	March 8	By balance c/d		20,049
			20,049				20,049

********

PROBLEMS  AND  ANSWERS  OF  SALES  BOOK

 

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

Basic Problem: 3          Sales Books

Jhapa Electronic Suppliers has following information:

Apr 10:          Sold to JK Sons:

                       10 fan heaters @ Rs 1,500 per unit

                       15 automatic heaters @ Rs 2,200 per unit

Apr 15:          Sold to Sharma Brothers:

                       15 table fans @ Rs 2,200 per unit

                       20 ceiling fans @ Rs 1,800 per unit

                       (Less off-season trade discount 12% on bill)

Apr 20:          Sold to Chaudhary Electrical for cash:

                       15 gas heater @ Rs 1,700 per unit (10% cash discount)

required:  (a) Sales book; (b) Sales account

[Answer: Sales book = 108,720; Sales account = 131,670;

*Cash sales (15 x Rs 1,700) @ 90% = Rs 22,950]

Basic Problem: 4          Sales Books

Aryal Textiles Traders has following extracted data: 

May 3:       Sold following items to Sagar Cloth House:

                             100 meters of cotton clothes @ Rs 250 per meter

                             150 meters of woollen clothes @ Rs 300 per meter

                             (Less 17% trade discount)

May 5:       Old furniture sold to Gupta Bros for Rs 5,000.

May 8:       Sold to Joshi Emporium:

                             125 woollen shirt pieces @ Rs 720 per piece

                             150 meters shirting @ Rs 220 per meter (14% trade discount)

Required: (a) Sales Book; (b) Sales Account; (c) Joshi Emporium account

[Answer: (a) 176,480; (b) 176,480; (c) 118,380]

***********

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