Lesson Notes By Weeks and Term - Senior Secondary 1

Working exercises on sales day book and return inward journal

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  4. Working exercises on sales day book and return inward journal

Term: 1st Term

Week: 9

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Working exercises on sales day book and return inward journal

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Describe the five columns in a sales day book
  2. Solve some exercises on sales day book and return inward journal

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on source documents and subsidiary books

Students pay attention

STEP 2

EXPLANATION

She describes the five columns in a sales day book

 

Students pay attention and participates

STEP 3

DEMONSTRATION

She solves some exercises on sales day book

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

SALES DAY BOOK AND RETURN INWARD JOURNAL

Format of Sales Day Book

Just like the purchase day book, the sales day book also has a similar

format of five columns.

  1. The first column is for the date of the credit sales transaction.
  2. In the second column, we record the name of the buyer with other

information about the sale. This includes the quantities, rates, discounts if

any etc.

  1. The third column is for the invoice number reference.
  2. The fourth column is the Ledger Folio number.

And finally

  1. The fifth column is for the net amount of the credit transaction.

 

These amounts are totaled at the end of the day, week, month etc. This

figure is posted in the Ledger account. And each individual buyer’s ledger

is posted with the amount of money they own the firm at the end of the said

period.

Illustrated Examples for Sales Day Book

Q: From the following transactions make the sales day book and the

necessary ledger accounts for ABC and Co.

  • Sold goods to X for 600/-
  • A credit sale of 10 units to Y for 35/- per unit
  • Sold 50 units to Z for 1350/- inclusive of 10% cash discount
  • Q bought units worth 500/- on credit

Ans:

Sales Day Book

Date

Buyer Names

Invoice

LF

Amount

01/01

X

    

600/-

02/01

Y (10 × 35)

    

350/-

03/01

Q

    

500/-
 

Total

    

1450/-

Note that the goods sold to Z will not be a part of the sales book as the

transaction is a cash transaction. So that transaction will be recorded in the

cash book.

X’s Account

Date

Particulars

Amount

Date

Particulars

Amount

01/01

To Sales Acc

600

      

 

Y’s Account

Date

Particulars

Amount

Date

Particulars

Amount

01/01

To Sales Acc

350

      

 

Q’s Account

Date

Particulars

Amount

Date

Particulars

Amount

01/01

To Sales Acc

500

      

 

Example

On 1 January 2016, the Modern Trading Company sold merchandise for

$2,500 to Small Retailers. Small Retailers received the delivery on the

same day and found the merchandise costing $500 did not meet the order

specification.

These merchandise were returned to the Modern Trading Company on the

same day. In turn, the Modern Trading Company granted a cash refund of

$500 to Small Retailers on 2 January 2016.

 

Required:

In the books of seller (i.e., Modern Trading Company), make a journal

entry:

  • At the time of the sale of merchandise for $2,500
  • At the time of the return of merchandise costing $500
  • At the time of the cash refund of $500

Solution

 

Return of Merchandise Sold on Account

When merchandise are returned by a credit customer, only one journal

entry is required. In this entry, the sales returns and allowances account is

debited and the accounts receivable account is credited.

Example

On 1 February 2016, John Enterprise sold merchandise for $1,500 to Sam

Enterprise on account. On the same date, merchandise amounting to $200

were returned to John Enterprise because they failed to meet the required

quality standards.

Required: Pass journal entries in the books of John Enterprise at the time

of the sale and at the time of the return of merchandise.

 

Solution

EVALUATION:    1. What should be entered in each of the five columns?

  1. Prepare Return Inward Journal (Book) from the following transactions of M/s Banku Electronics for July 2017: 2017
    July
   

Naira

04

M/s Shade Traders returned the goods

1,500

10

Goods returned from M/s Harish Traders

800

18

M/s Seline Traders returned the goods not as

per specifications

1,200

28

Goods returned from Tarot Traders

1,000
  1. Record the following transactions in the sales return book.

                             Two water purifiers were sold to M/s Julius Traders for  N2,100 each, out of which one purifier was returned back due to the manufacturing defect (Credit Note No. 10/2016).

                             Other transactions were

                             (i) M/s Gupta Traders returned the purifiers     1,500

                             (ii) Purifiers returned from M/s Harold Traders    800

                             (iii) M/s Balikis Traders returned the purifiers not as per specifications 1,200

                             (iv) Purifiers returned from M/s Kenzy Traders1,000

                             Also prepare sales return account and M/s Julius Traders account.

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively