This book records the goods returned to suppliers. It is also called a purchase return day/ outward book. Goods return affects the companies' total purchases or accounts payable.Return outwards reduces business payables for suppliers and business expenses.Journal entryThe journal entry for a return outward book is as follows −Supplier's A/cDebitTo Return outwards A/cCreditHow it affects businessReduces accounts payables. Both sale return and purchase return are reversed and purchase or sale is nullified. These deductions are shown in the trading account. To these entries a separate book called "purchase returns book" is maintained.The return outward process is explained below with the ... Read More

Let us consider two examples to learn how to prepare a return inwards book.Example 1Refer the transactions given below and prepare return inwards book.On December 4 − X return goods worth of Rs.1000/- on which trader allowed a discount of 5% (credit note # 233).On December 10 − Y allowed a reduction of Rs.1500/- (invoice issued earlier) (credit note #234)On December 12 − Z return goods worth of Rs.1175/- (credit note # 235).On December 20 − D was issued an invoice of Rs.2300/-, trader allowed a discount of 20%, after he pointed out a defect in goods for the same invoice (credit ... Read More

Goods returned from customers are recorded in return inwards book.Return inwards reduces the business total accounts receivables. For business, return inwards decrease the revenue and for the customer, it decreases the receivables for business.Journal entryThe journal entry for a return inward book is as follows −Return inwards A/c     To customers AcDebit     CreditThe reasons for inward returns are as follows −Incorrect goods.Not the required quantity.Defective goods.Defects arose in the warranty period.Expired goods.AdvantagesThe advantages for the return inward book are as follows −Reason for return is known (like quantity, quality, value etc.)Obtain total amount of sale return.Reduces clerical work.Detects errors ... Read More

The transactions made by a FVY & co are as follows −On 3rd March − Goods sold to Ramkhi for 850/-On 12th march − 15 units sold to Yusuf for 50/- per unit.On 16th march − 40 units are sold to Vinod for 1600/- (includes 8% cash discount)On 20th march − Irfan bought goods worth 750/- on credit.SolutionFVY & co sold goods toOn march 3rd 2008 − Goods sold to ramkhi worth of Rs.850/-On march 12th 2008 − Goods sold to yusuf worth of Rs.750/-Worth = 15*70 = Rs.750/-On march 20th 2008 − Goods sold to Irfan worth of Rs.750/-The sales ... Read More

It is a manual ledger document, which contains information of sales made by a person on a business day. It is also called a sales register.Management analyses the effective amount after reconciliation every month. Sales day book is a subsidiary book, which maintains the overall sales and updates the sales every month end.It records all non-cash transactions related to sales. If a company sells any asset or investment on credit, these transactions are not recorded in the sales book, but those are recorded in a proper journal.Sales day book is also called a sales book/ sales journal/ sold book etc. ... Read More

A company purchases for the month of April 2012 as follows, On 6th April − Bought 25 computers from Com co. Each computer cost Rs.25000/- with 8% trade discount.On 12th April − Bought 150 phones from PHO co. Each phone cost Rs.950/- on credit.On 17th April − Bought 400 televisions from TV co. Each television cost 23580/- at a 4% cash discount.On 20th April − Purchased 150 radios from Ra co. Each cost them 320/- on credit.SolutionThe purchase day book is prepared for the above mentioned data.Amount due for Com co.Step 1 − On April 6th 25 computers were purchased ... Read More

Accounts are divided into two types namely primary accounts and secondary accounts. In books of primary entry, there are special books called subsidiary books.Purchase day book is a type of subsidiary book. Its main purpose is to record all business credit purchases (meant for resale). This book does not record purchase transactions (by cash) and purchases which are not meant for resale purchases.Cash purchase transactions are recorded in the cash book. Balance is debited to purchase account and supplier of goods is credited to individual amounts. This book shows the total amount of credit purchases for a period.Purchase book is ... Read More

It is the form filled by taxpayers by the month of September of the assessment year. This audit report form consists of two variants, form 3CA and form 3CB. Form 3CA is the compulsory form filed by business persons or business professionals. Form 3CB filled by persons, who come under the section 44AD and 44AE.Audit requirementsAudit is compulsory for a business individual, if total sales/turnover/gross receipts exceeds more than Rs. 1 crore.Audit is compulsory for a professional individual, if gross receipts exceed more than Rs.50 lakhs.Under section 44AE (presumptive income scheme), audit is compulsory when business income is less than ... Read More

Books of accounts are defined as "a place where all financial information is related to a person or a business". Books of accounts are maintained under Income tax Act, companies Act 2013 and GST Act.Maintaining books of accounts is compulsory if the turnover/gross receipts/sales from profession or business is above Rs.2500000/-. As per rule 6F, cash books, ledgers, bills/receipts (Bills), journals and daily cash registers come under books of accounts.TypesThe two main types of the books of accounts are journal and ledger.Journal is sub classified into the following −Purchase Day book − Original book of entry which records credit purchases ... Read More

Books of accounts are the records, which maintain the day to day business operations of all the business establishments and taxpayers, to know results of their operations.Books of accounts should be registered annually. For certificates like certificate of registration (COR) with the Bureau of Internal Revenue (BIR), these books of accounts are required. They are maintained for six years from the end of the relevant assessment year. These are maintained at the head offices or at each of the offices.Maintaining books of accountsProfessionals like legal, medical, engineering, architectural, accountancy, technical consultancy, interior decorations and who are notified by the Central ... Read More