Chapter 12
Books of Original Entry – Special Purpose Subsidiary Books
Subsidiary books, also known as Special Purpose Books or Day Books, are specialized journals used to record a large number of similar and repetitive transactions. Instead of recording every transaction in one main journal (the General Journal), businesses use these separate books to make the recording process more efficient an d organized. They are books of original entry because transactions are first recorded in them chronologically.
- Purchase Book (or Purchases Day Book)
The Purchase Book is used to record all credit purchases of goods meant for resale.
- It does not record cash purchases (recorded in Cash Book) or purchases of assets (recorded in Journal Proper or relevant asset account).
- Information is taken from Inward Invoices.
Format of Purchase Book
|
Date |
Particulars |
Invoice
No. |
L.F |
Details |
Purchase |
Input
CGST |
Input
SGST |
Input
IGST |
Freight
Inwards |
Total
Amount |
Illustration: 01
Transactions:
- Jan 5: Purchased goods from Shivam Electronics on credit
- 10 LED TVs @ ₹15,000 each
- 5 Refrigerators @ ₹25,000 each
- Trade Discount 10%
- Jan 12: Purchased furniture from Modern Furniture on credit for office use: ₹50,000
- Jan 18: Purchased goods from Gauri Enterprises on credit
- 20 Washing Machines @ ₹18,000 each
- 15 Microwave Ovens @ ₹10,000 each
- Jan 25: Purchased goods for cash from Ram Suppliers: ₹30,000
Solution:
Purchase Book of M/s. Om Traders
For the month of January 2024
| Date | Particulars (Name of Supplier & GSTIN) | Invoice No. | L.F. | Details (₹) | Purchases (₹) | Input CGST (₹) | Input SGST (₹) | Total Amount (₹) |
| 2024 | ||||||||
| Jan 5 | Shivam Electronics | |||||||
| 10 LED TVs @ ₹15,000 | 1,50,000 | |||||||
| 5 Refrigerators @ ₹25,000 | 1,25,000 | |||||||
| Sub-total | 2,75,000 | |||||||
| Less: Trade Discount (10%) | 27,500 | |||||||
| Net Value of Goods | 2,47,500 | |||||||
| Add: Input CGST @ 9% | 22,275 | |||||||
| Add: Input SGST @ 9% | 22,275 | 2,92,050 | ||||||
| Jan 18 | Gauri Enterprises | |||||||
| 20 Washing Machines @ ₹18,000 | 3,60,000 | |||||||
| 15 Microwave Ovens @ ₹10,000 | 1,50,000 | |||||||
| Net Value of Goods | 5,10,000 | |||||||
| Add: Input CGST @ 9% | 45,900 | |||||||
| Add: Input SGST @ 9% | 45,900 | 6,01,800 | ||||||
| Total | 7,57,500 | 68,175 | 68,175 | 8,93,850 |
Difference between Purchase Book & Purchase Account
| Feature | Purchase Book | Purchases Account |
| Type of Book | Subsidiary Book / Journal | Ledger Account |
| Transactions Recorded | Only Credit Purchases of Goods | Both Credit & Cash Purchases of Goods |
| Purpose | Detailed, chronological recording of individual credit purchases | Summary of total purchases for a period, used for financial statements |
| Debit/Credit Sides | No separate debit/credit columns; records details in specific columns | Has distinct Debit and Credit sides |
| Information | Provides detailed transaction-wise information | Provides summarized, aggregated information |
| Final Destination | Its total is transferred to the Purchases Account | Its balance is transferred to the Trading Account |
| Role in Accounting Cycle | First stage of recording transactions | Second stage; summarizes and prepares for final accounts |
2) Sales Book (or Sales Day Book)
The Sales Book is used to record all credit sales of goods.
- It does not record cash sales (recorded in Cash Book) or sales of assets.
- Information is taken from Outward Invoices.
Format of Sales Book
|
Date |
Particulars |
Invoice
No. |
L.F |
Details |
Sale |
Output
CGST |
Output
SGST |
Output
IGST |
Freight
& Packing charge |
Total
Amount |
Illustration:02
- June 3: Sold goods to R.K. Stores on credit
- 15 Desktop Computers @ ₹40,000 each
- 10 Printers @ ₹8,000 each
- Trade Discount 5%
- June 10: Sold old office furniture for cash to Jai Enterprises: ₹15,000
- June 17: Sold goods to Vishal Distributors on credit
- 25 Laptops @ ₹35,000 each
- Trade Discount 10%
- June 22: Sold goods for cash to S.K. Electronics: ₹55,000
- June 28: Sold goods to Computer World on credit
- 5 Servers @ ₹1,50,000 each
Solution:
Sales Book of M/s. Global Traders
For the month of June 2024
| Date | Particulars (Name of Customer & GSTIN) | Invoice No. | L.F | Details (₹) | Sales (₹) | Output CGST (₹) | Output SGST (₹) | Total Amount (₹) |
| 2024 | ||||||||
| June 3 | R.K. Stores | |||||||
| 15 Desktop Computers @ ₹40,000 | 6,00,000 | |||||||
| 10 Printers @ ₹8,000 | 80,000 | |||||||
| Sub-total | 6,80,000 | |||||||
| Less: Trade Discount (5%) | 34,000 | |||||||
| Net Value of Goods | 6,46,000 | |||||||
| Add: Output CGST @ 9% | 58,140 | |||||||
| Add: Output SGST @ 9% | 58,140 | 7,62,280 | ||||||
| June 17 | Vishal Distributors | |||||||
| 25 Laptops @ ₹35,000 | 8,75,000 | |||||||
| Less: Trade Discount (10%) | 87,500 | |||||||
| Net Value of Goods | 7,87,500 | |||||||
| Add: Output CGST @ 9% | 70,875 | |||||||
|
|
Add: Output SGST @ 9% | 70,875 | 9,29,250 | |||||
| June 28 | Computer World | |||||||
| 5 Servers @ ₹1,50,000 | 7,50,000 | |||||||
| Net Value of Goods | 7,50,000 | |||||||
| Add: Output CGST @ 9% | 67,500 | |||||||
| Add: Output SGST @ 9% | 67,500 | 8,85,000 | ||||||
| Total | 21,83,500 | 1,96,515 | 1,96,515 | 25,76,530 |
3) Purchase Return Book (or Returns Outward Book)
The Purchase Return Book records goods returned to suppliers that were previously purchased on credit.
- Information is taken from Debit Notes issued by the business to the supplier.
Format of Purchase Return Book
|
Date |
Particulars |
Debit
Note No. |
L.F
|
Details |
Purchase
Return |
Input
CGST |
Input
SGST |
Input
IGST |
Total
Amount |
Illustration:03
- July 4: Returned 2 damaged Washing Machines to Gauri Enterprises.Original purchase price ₹18,000 each.
- July 10: Returned 1 defective Refrigerator to Shivam Electronics.Original purchase price ₹25,000.
- July 15: Old office printer (an asset) returned to supplier for repair: ₹5,000.
- July 20: Goods purchased for cash from Local Market returned for cash: ₹2,000.
Solution:
Purchase Return Book of M/s. Bharat Stores
For the month of July 2025
| Date | Particulars (Name of Supplier & GSTIN) | Debit Note No. | L.F. | Details (₹) | Purchases Return (₹) | Input CGST (₹) | Input SGST (₹) | Total Amount (₹) |
| 2025 | ||||||||
| July 4 | Gauri Enterprises | 001 | ||||||
| 2 Washing Machines @ ₹18,000 | 36,000 | 36,000 | ||||||
| Less: Trade Discount (if any from original purchase) | 0 | |||||||
| Add: Less: Input CGST @ 9% | 3,240 | |||||||
| Add: Less: Input SGST @ 9% | 3,240 | 42,480 | ||||||
| July 10 | Shivam Electronics | 002 | ||||||
| 1 Refrigerator @ ₹25,000 | 25,000 | 25,000 | ||||||
| Less: Trade Discount | 0 | |||||||
| Add: Less: Input CGST @ 9% | 2,250 | |||||||
| Add: Less: Input SGST @ 9% | 2,250 | 29,500 | ||||||
| Total | 61,000 | 5,490 | 5,490 | 71,980 |
4) Sales Return Book (or Returns Inward Book)
The Sales Return Book records goods returned by customers that were previously sold on credit.
- Information is taken from Credit Notes issued by the business to the customer.
Format of Sales Return Book
|
Date |
Particulars |
Credit
Note No. |
L.F |
Details |
Sales
Return |
Output
CGST |
Output
SGST |
Output
IGST |
Total
Amount |
Illustration:04
- Aug 5:K. Stores returned 3 Desktop Computers as they were not as per order. Original sales price ₹40,000 each. (Credit Note No. 001)
- Aug 12: Vishal Distributors returned 1 Laptop due to a manufacturing defect. Original sales price ₹35,000. (Credit Note No. 002)
- Aug 18: Customer returned goods that were sold for cash: ₹5,000.
- Aug 25: Received back defective office printer (an asset) from a customer for repair; original value ₹10,000.
Solution:
Sales Return Book of M/s. Tech Solutions
For the month of August 2025
| Date | Particulars (Name of Customer & GSTIN) | Credit Note No. | L.F. | Details (₹) | Sales Return (₹) | Output CGST (₹) | Output SGST (₹) | Total Amount (₹) |
| 2025 | ||||||||
| Aug 5 | R.K. Stores | 001 | ||||||
| 3 Desktop Computers @ ₹40,000 | 1,20,000 | 1,20,000 | ||||||
| Less: Trade Discount | 0 | |||||||
| Less: Output CGST @ 9% | 10,800 | |||||||
| Less: Output SGST @ 9% | 10,800 | 1,41,600 | ||||||
| Aug 12 | Vishal Distributors | 002 | ||||||
| 1 Laptop @ ₹35,000 | 35,000 | 35,000 | ||||||
| Less: Trade Discount | 0 | |||||||
| Less: Output CGST @ 9% | 3,150 | |||||||
| Less: Output SGST @ 9% | 3,150 | 41,300 | ||||||
| Total | 1,55,000 | 13,950 | 13,950 | 1,82,900 |
5) Journal Proper or General Journal
The Journal Proper is used to record all those transactions that cannot be recorded in any other subsidiary book. It is essentially the “residual” journal.
Opening Entries: To bring forward balances of assets and liabilities from the previous accounting period.
Closing Entries: To close nominal accounts at the end of the accounting period by transferring them to the Trading and Profit & Loss Account.
Adjustment Entries: Entries passed at the end of the accounting period to account for outstanding expenses, prepaid expenses, accrued income, unearned income, depreciation, etc.
Rectification Entries: Entries passed to correct errors discovered in the books of accounts.
Transfer Entries: To transfer amounts from one account to another.
Credit Purchase/Sale of Assets: When an asset e.g., machinery, furniture is purchased or sold on credit.
Bad Debts Written Off: When an amount due from a debtor becomes irrecoverable.
Illustration:05
Pass the necessary Journal Proper entries for the following transactions of M/s. Ideal Solutions for September 2024:
- Sept 1: Business commenced with Machinery ₹5,00,000, Furniture ₹1,00,000, Stock of Goods ₹2,00,000.
- Sept 7: Purchased an old Motor Van from Krishna Motors on credit for ₹1,50,000.
- Sept 15: Depreciation charged on Machinery @ 10% p.a. for the month of September.
- Sept 20: Goods worth ₹10,000 were distributed as free samples.
- Sept 25: Bad Debts written off from Mr. Anil: ₹5,000.
- Sept 30: Outstanding Salary for the month of September: ₹15,000.
Solution: Journal Proper of M/s. Ideal Solutions
For the month of September 2024
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| 2024 | ||||
| Sept 1 | Machinery A/c Dr. | 5,00,000 | ||
| Furniture A/c Dr. | 1,00,000 | |||
| Stock A/c Dr. | 2,00,000 | |||
| To Capital A/c | 8,00,000 | |||
| (Being business commenced with various assets) | ||||
| Sept 7 | Motor Van A/c Dr. | 1,50,000 | ||
| To Krishna Motors A/c | 1,50,000 | |||
| (Being old Motor Van purchased on credit) | ||||
| Sept 15 | Depreciation A/c Dr. | 4,167 | ||
| To Machinery A/c | 4,167 | |||
| (Being depreciation charged on machinery for September) | ||||
| Sept 20 | Advertisement (or Samples) A/c Dr. | 10,000 | ||
| To Purchases A/c | 10,000 | |||
| (Being goods distributed as free samples) | ||||
| Sept 25 | Bad Debts A/c Dr. | 5,000 | ||
| To Mr. Anil’s A/c | 5,000 | |||
| (Being bad debts written off) | ||||
| Sept 30 | Salary A/c Dr. | 15,000 | ||
| To Outstanding Salary A/c | 15,000 | |||
| (Being salary outstanding for the month of September) |