Sub-Division of Journal : Special Purpose Subsidiary books

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Special purpose subsidiary books are separate books used to record non-cash transactions. Cash transactions go to the Cash Book. The five special purpose subsidiary books are Purchases Book, Sales Boo…

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Subsidiary books make accounting easier and faster by dividing work into separate books. They help in checking transactions, reduce fraud, improve efficiency, save time, give full information at one p…

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Purchases Book is meant for recording only credit purchases of goods in which the businessman deals. It is also called invoice book, purchases journal, or purchases day book. Cash purchases and purcha…

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Cash purchases are not recorded because they go to the Cash Book. Purchases of assets, whether cash or credit, are also not recorded in the Purchases Book. Credit purchase of an asset goes to Journal …

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Entries in the Purchases Book are made on the basis of purchase invoices received from suppliers. An invoice contains quantity, quality, rate, amount, and trade discount details.

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Trade discount is deducted before recording the purchase amount. Net Purchase or Sale Amount = List Price − Trade Discount. Cash discount is not recorded in the Purchases Book.

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GST is added to the net purchase amount after deducting trade discount. Amount payable = Net Amount after trade discount + GST. GST is shown separately in CGST, SGST, and IGST columns.

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CGST means Central Goods and Service Tax and goes to the Central Government. SGST means State Goods and Service Tax and goes to the State Government. IGST means Integrated Goods and Service Tax and ap…