📝 Chapter Notes & Revision

Recording of Transactions - II

🏫 MP BoardClass 11Accountancy

📐 Formula & Cheat Sheet (English)

Quick Revision Notes & Formula Sheet

Class: 11th
Subject: Accountancy
Chapter: Recording of Transactions - II (Special Purpose Books / Subsidiary Books)

### 1. Introduction to Subsidiary Books (सहायक पुस्तकें)

When the size of a business grows, recording all transactions in a single Journal (Journal Proper) becomes impractical and tedious. The Journal is subdivided into various special-purpose books called Subsidiary Books or Day Books.

  • Cash Book: Records all cash receipts and cash payments.
  • Purchases Book: Records credit purchases of goods (not assets).
  • Sales Book: Records credit sales of goods (not assets).
  • Purchases Return Book: Records return of goods purchased on credit.
  • Sales Return Book: Records return of goods sold on credit.
  • Bills Receivable Book: Records acceptances received from debtors.
  • Bills Payable Book: Records acceptances given to creditors.
  • Journal Proper: Records residual transactions that do not fit into any of the above books.

### 2. Cash Book (रोकड़ बही)

The Cash Book is both a subsidiary book and a principal book (ledger account). It records all cash and bank transactions.

Types of Cash Books:

  1. Simple Cash Book (Single Column): Records only cash receipts (Debit side) and cash payments (Credit side).
  2. Double Column Cash Book (Two Column): Contains Cash and Discount columns, or Cash and Bank columns. (Most common in syllabus: Cash & Bank columns).
  3. Triple Column Cash Book (Three Column): Contains Cash, Bank, and Discount columns.
  4. Petty Cash Book: Maintained for recording small expenses (stationery, postage, refreshments, etc.) under the Imprest System (इम्प्रेस्ट प्रणाली).

Key Rule for Cash Book:

  • Receipts (Dr.): "Come in" -> Debit what comes in.
  • Payments (Cr.): "Go out" -> Credit what goes out.

### 3. Contra Entry (कन्ट्रा प्रविष्टि)

A Contra Entry is an entry where both Cash and Bank accounts are affected. It appears on both sides of the Double/Triple Column Cash Book and is denoted by the letter 'C' in the Ledger Folio (L.F.) column.

Conditions for Contra Entry:

  1. Cash deposited into Bank:
    • Entry: Bank A/c Dr. To Cash A/c
    • Posting: Appears on the Debit side in Bank Column and Credit side in Cash Column.
  2. Cash withdrawn from Bank for office use:
    • Entry: Cash A/c Dr. To Bank A/c
    • Posting: Appears on the Debit side in Cash Column and Credit side in Bank Column.

Note: Cash withdrawn for personal use (Drawings) is NOT a contra entry.

### 4. Purchases Book & Sales Book

  • Purchases Book (क्रय बही): Records only credit purchases of goods in which the business deals.
    • Formula for Net Amount: List Price - Trade Discount + GST (CGST + SGST / IGST)
  • Sales Book (विक्रय बही): Records only credit sales of goods in which the business deals.
    • Formula for Net Amount: List Price - Trade Discount + GST (CGST + SGST / IGST)

Important: Cash purchases/sales, and purchases/sales of fixed assets (like machinery, furniture) are never recorded here. They go to the Cash Book and Journal Proper respectively.

### 5. Purchases Return & Sales Return Books

  • Purchases Return Book (Return Outwards Book): Records goods returned to suppliers for reasons like defect, poor quality, etc.
    • Source Document: Debit Note (डेबिट नोट) issued to the supplier.
  • Sales Return Book (Return Inwards Book): Records goods returned by customers.
    • Source Document: Credit Note (क्रेडिट नोट) issued to the customer.

### 6. Imprest System of Petty Cash (लघु रोकड़ बही की अग्रिम प्रणाली)

Under this system, a fixed amount (Imprest Amount) is given to the Petty Cashier at the beginning of a fixed period (e.g., a month). At the end of the period, the petty cashier submits the expense vouchers, and the main cashier reimburses the exact amount spent, bringing the petty cash balance back to the original imprest amount.

  • Formula for Reimbursement: Reimbursement Amount = Opening Imprest - Expenses Incurred OR Closing Balance + Expenses = Opening Imprest

### 7. Journal Proper (सामान्य जनरल / मूल जनरल)

Used for recording entries that cannot be accommodated in any of the specialized subsidiary books.

Common Types of Entries in Journal Proper:

  1. Opening Entry: Recording balances of assets, liabilities, and capital at the beginning of a new accounting year.
  2. Closing Entry: Transferring nominal accounts to Trading and Profit & Loss A/c.
  3. Rectification Entries: Correcting errors made in books of accounts.
  4. Transfer Entries: Transferring an amount from one account to another.
  5. Adjustment Entries: Adjustments for outstanding expenses, prepaid expenses, depreciation, closing stock at the end of the accounting period.
  6. Miscellaneous Entries: Credit purchase/sale of fixed assets, loss of goods by fire/theft, goods given as charity/samples.