Purchases and purchases return books

The purchases book records only goods bought on credit: the things the business buys in order to sell. Goods bought for cash go in the cash book. Assets bought on credit, like furniture for the office or a machine, go in the journal proper. A stationery dealer's purchases book would hold registers, pens and notebooks bought on credit, but not a new office table.

Its columns are Date, Particulars (the supplier's name), Invoice number, L.F., Details and Amount. The amount entered is the net amount, after taking off the trade discount. The trade discount itself is never posted anywhere.

Example from the book: 20 TVs @ ₹2,000 and 15 tape recorders @ ₹12,500, less 20% trade discount. (40,000 + 1,87,500) × 80% = ₹1,82,000. Another: 40 registers @ ₹60, 80 pens @ ₹15 and 50 notebooks @ ₹20 = ₹4,600, less 10% = ₹4,140.

Posting: each supplier's account is credited (we owe them) as the purchases happen. At the end of the month, the book's total is debited to the Purchases account in one line, "To Sundries as per Purchases Book".

Goods sent back to a supplier go in the purchases return book. The buyer sends the supplier a debit note ("we have debited your account"), and that note is the source document. Each supplier is debited; the total is credited to the Purchases Returns account.

With GST, an analytical purchases book adds columns for the purchase value, CGST, SGST and IGST: CGST + SGST for a supplier in the same State, IGST for one in another State.