Books of Accounts

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There are two main books of accounts, Journal and LedgerJournal used to record the economic transaction chronologically. Ledger used to classifying economic activities according to nature. 

books of accounts

Types of Journals

Special Journals are used in large business organizations, where it is found inconvenient to journalize every transaction in one journal. Therefore, the journal is sub-divided into different journals known as the subsidiary books. The journal is divided in such a way that a separate book is used for each class of transactions The important books of accounts used in modern business world are the following:

  • Purchase Day Book
  • Sales Day Book
  • Return Inward Book
  • Return Outward Book
  • General Journal


>> Practical Multiple Choice Questions Books of Accounts MCQs.


Video Lecture: Books of Accounts in Urdu & Hindi-Workbook Practice



Purchases Day Book

Purchases book or purchases day book is a book of original entry maintained to record credit purchases. You must note that cash purchases will not be entered in purchases day book because entries in respect of cash purchases must have been entered in the Cash Book. At the end of each month, the purchases book is totaled. The total shows the total amount of goods purchased on credit. Purchases book is written up daily from the invoices received. The invoices are consecutively numbered. The invoice of each number is noted in the purchases book.

Purchase Day Book Format

Purchase Day Book Format


Example # 1:

From the following transactions of a trader prepare the Purchases day book:


Jan 5                     Purchased goods from Qurat Ul Ain & Co                                     Rs. 2,400

”     15                     Purchased goods from Saba Sajjad                                                     6,000

”     25                     Purchased goods from Omer Nawaz & Co                                          1,500

”     30                     Purchased goods from Maqbool & Co                                                 3,000



purchase day book example


Sales Day Book

A sales book is also known as sales day book in which are recorded the details of credit sales made by a businessman. Total of sales book shows the total credit sales of goods during the period concerned. Usually the sales book is totaled every month. The sales day book is written up daily from the copies of invoices sent out.


Sales Day Book Format

sales day book format


Example # 2:

From the following transactions of a trader prepare the sales day book of M. Amin:



March    5              Sold goods to Ideal College                                        Rs. 200

”              10           Sold goods to Ahmad & Co                                              100

”              20           Credit sales to Ayesha Bibi                                             400

”              31           Sold goods to Gulbaz Khan                                             100



sales day book example


Return Inward Book

Sales returns book is also called returns inwards book. It is used for recording goods returned to us by our customers. Customers who return goods should be sent a credit note. It is a statement sent by a business to customer showing the amount credited to the account.

debit note and credit note


Return Inward Book Format

Return Inward Book Format


Example # 3:

From the following transactions of a trader prepare the sales returns book:



June 8                                    Goods returned by Sana Khalid & Co                             Rs. 40

”     20                                     Goods returned by Ideal Traders                                            52



return inward book example


Return Outward Book

Purchases returns book is a book in which the goods returned to suppliers are recorded. It is also called returns outward book or purchases returns day book. Goods may be returned because they are of the wrong kind or not up to sample or because they are damaged etc.When the goods are returned to the suppliers, intimation is sent to them through what is known as a debit note. These debit notes serve as vouchers for these entries. A debit note is a statement sent by a businessman to vendor, showing the amount debited to the account.

debit and credit note


 Return Outward Book Format

Return Outward Book Format


Example # 4:

From the following transactions of a trader prepare the purchases returns day book:


July 14                                   Karim & Sons                                       Rs. 135

”     27                                     Maria Waheed & Co                                 150

”     31                                     Saeed Bros                                                   25



return outward book example


>> Download and Practice Books of Accounts Problems PDF


Proper General or General Journal

Journal proper is book of original entry (simple journal) in which miscellaneous credit transactions which do not fit in any other books. It is also called miscellaneous journal or General Journal. For example purchase assets on credit, Correcting Entries, Adjusting Entries and Closing Entries etc.


Example # 5:

Record the following transactions in the appropriate journal?



March    3              Purchased goods from Ali & Co for Rs. 4,500

“           8              Sold merchandise to Naeem & Sons worth of Rs. 6,000

“            12           Purchase merchandise from B & Brothers Rs. 3,000

“            14           Credit sales of goods to Z & Co for Rs. 2,500

 “            15           Naeem & Sons returned goods Rs. 1,000

“            18           Return merchandise to Ali & Co Rs. 500

“            22           Purchase Furniture from Mr. Saeed of Rs. 3,200

“            24           Returned goods to B & Brothers of Rs. 200

“            27           Purchase Machinery on account from MMM Machines Rs. 7,000

“            29           Z & Co returned merchandise of Rs. 300



subsidiary books of accounts


maintenance of books of accounts


books of accounts to be maintained


special journals


special journals in accounting


>>> Practice Books of Accounts Quiz 1 and Quiz 2.


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Mukharji, A., & Hanif, M. (2003). Financial Accounting (Vol. 1). New Delhi: Tata McGraw-Hill Publishing Co.

Narayanswami, R. (2008). Financial Accounting: A Managerial Perspective. (3rd, Ed.) New Delhi: Prentice Hall of India.

Ramchandran, N., & Kakani, R. K. (2007). Financial Accounting for Management. (2nd, Ed.) New Delhi: Tata McGraw Hill.


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    One small addition that would make the concept holistic would be to give an introduction of the scenario preceding Books of Original Entry i.e. Source Document.

    A Source Document is also known as a prime book, or subsidiary books or daybook or journal. It usually contains the raw and unprocessed information. This information is then transferred to books of original entry in a summarized manner.

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