Page 71 - Book-keeping for Secondary Schools Student’s Book Form One

Recording of business transactions

should be noted that the use of a debit note for this purpose is not common these
days. Actual confirmation of the return is best achieved when the seller accepts the
returned goods and issues a credit note. The best practice is therefore to use a credit
note as evidence for the returns of goods and source document for entering the returns
in the journal. Transactions relating to the returns of goods are recorded in the purchase
FOR ONLINE READING ONLY
returns daybook. The columns for the purchase return daybook are the same as columns
for the sales return daybook.

Activity 4.11

One of the arguments that emerged in your ‘after class discussion in this week was
why the source documents for entries in the purchase return daybook and sales
return daybook are not the debit note and credit note, respectively. You volunteered
to ask this question to your Book-keeping teacher and, instead of giving you an
answer, the teacher instructed you to read and clarify this matter to your fellow
students before the next class, which takes place in the coming week.
Write brief notes that you will use to clarify the matter.

Example 4.4

Record the following transactions in the purchases returns daybook for the month of
July 2023.

July 8 Returned to Tom Ltd. and received a credit note number 06569:
2 bags of rice (5kgs) @ TZS 10,000 because they had expired.

4 bags of sugar (5kgs) @ TZS 15,000 because they had expired.

18 Returned to Asha and a received credit note number 03447:

4 boxes of pens @ TZS 2,000 because they were of the wrong specifi-
cation.

1 carton of ruled papers @ TZS 30,000 because it was not ordered.
29 Returned to Katabo and received a credit note number 02940:

Goods worth TZS 14,800 were spoiled.

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