B1: 3.03 The Purchases Day Book & Purchases Returns Day Book

The Purchases Day Book (“PDB”) and Purchases Returns Day Book (“PRDB”) have much in common with the Sales Day Book and Sales Returns Day Book. The difference is that the PDB records information from invoices received from its suppliers who supply goods or services on credit terms and the PRDB records information from credit notes received from its suppliers.

The Purchases Day Book

The PDB is structured in a similar way to a Sales Day Book. In it we will record the following information:

  • The date of the supplier’s invoice
  • The name of the supplier
  • The unique reference assigned by the business to the supplier
  • The invoice number assigned by the business to the invoice
  • The gross or total amount invoiced
  • The VAT charged on the invoice
  • The net amount charged (which may be split between different types of expense)
Example of a Purchases Day Book

At the end of an accounting period such as a week or month, a bookkeeper or accountant will add up the totals of the columns. At this point they can also undertake cross-add checks to help ensure that no errors have been made in the PDB’s completion. In the above example for instance, the total of the Purchases, Couriers and VAT columns should equal the total of the Gross or Total column. If this is not the case we know that an error has been made and can then investigate and update the PDB as required.

The Purchases Returns Day Book

The Purchases Returns Day Book will have an almost identical layout to the PDB. The differences being:

  • There will be a column to record the unique credit note reference number assigned to each credit note rather than a column to record the invoice number
  • The PDB will include a Purchases Returns column to record the net value of the purchases returns (i.e. the reduction in the amount charged for materials or goods previously invoiced).
Example of a Purchases Returns Day Book

As was the case with the PDB, at the end of an accounting period the columns of the PRDB will be added up. A cross-add check can then take place to reduce the risk that an error has been made. For the above example, the total of the Purchases Returns, Couriers and VAT columns should add up to the same figure as the total of the Gross or Total column. If not, we know that an error has been made which needs to be identified and then corrected.

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