DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : R. ROHINI
Designation : Lecturer
Branch : D.C.C.P
Institute : S.G.M. Govt Polytechnic,
Abdullapurmet
Year/Semester : I Year
Subject : Accountancy-I
Subject Code : CCP-102
Topic : Subsidiary Books (2/15)
Duration : 50 Mts
Sub Topic : Purchases book
Teaching Aids : PPT, Animations and Photographs
CCP102.37 1
Objectives

After completion of this period, you would be

able to know:
 What is Purchases ?

 Types of discounts

 Preparation of Purchases Book

 What is Invoice ?

 Preparation and postings into Ledgers

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Structure

 Meaning Purchases Book

 Proforma of Purchases Book
 Invoice
 Postings into Ledgers
 Summary
 Quiz and Questions

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Purchases book

 Goods purchased on credit

 Recording only Credit Purchases

 Credit Purchases of goods meant for resale

 Trade discount not recorded in the books

 Cash Purchases are not considered

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What is Discount ?
Concession received
 from manufacturer to wholesaler
 wholesaler to retailer
 retailer to customer

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Types of Discounts

 Cash Discount

 Trade Discount

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Cash Discount:
 Cash discount offered by the creditor to debtor
for prompt payment
 It will be recorded in the books of accounts

 It is given in addition to the trade discount

 It will be of a small percentage eg. 5 % or 10 %

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Trade Discount
 It is allowed on the invoice price

 To enable the dealer to meet his expenses and also earn

profits

 It is not recorded in the books of accounts

 It is allowed by one dealer to another dealer

CCP102.37 8
Invoice

 It is a statement prepared by the seller

 It contains all the particulars about the

goods supplied

 Eg. Description of the goods, rate,

freight charges trade discount

allowed etc.,

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Proforma of Invoice

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Proforma of purchases book

Partic Inward
Date Invoice. L.F Amount
ulars
No.

1999 M/s Raja 05 23 5000

Jan 1 & Co.

Date : Date of Purchase

 Particulars : Supplier’s Name

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Proforma of purchases book

Inward
Date Particulars L.F Amount
Invoice. No.

1999 M/s Raja & Co 05 23 5000

Jan 1 Total 5000

 Invoice No : Invoice No.

 L.F : Ledger Folio No.
 Amount : Amount of the Invoice
CCP102.37 12
Ledger Postings

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 Purchases a/c
Date Particulars Amt Date Particulars Amt
1999 To sundries
5,000
Jan1 a/c

Raja’s a/c

Date Particulars Amt Date Particulars Amt

1999 By Purchases
5,000
Jan1 a/c

CCP102.37 14
Summary

 Sub-division of Journal is Subsidiary Books

 Purchase book for recording of credit purchases
 Trade discount allowed for credit transactions only

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QUIZ

1. Purchases Book is meant to record

a) Cash Purchases

b) Cash Sales

c) Credit Purchases

d) None of the above

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2. Purchases Book is also called as
a) Cash Book
b) Purchases Journal
c) Purchase returns Book
d) All the above

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THANK YOU

CCP102.37 18