Purchase Book, Purchase Return & Debit Note Explained
Day 23 – 50 Days Accounting Challenge by CA Devesh Thakur
Accounting is the backbone of every business. To understand accounting properly, students must first master the basic books of original entry.
In Day 23 of the 50 Days Accounting Challenge, we focus on one of the most important foundational topics:
- Purchase Book (Purchases Journal)
- Difference between Purchase Book and Purchase Account
- Purchase Return (Return Outward)
- Debit Note – concept and practical use
- Journal entries with proper narration
This topic is extremely important for Class 11 students, beginners, and anyone learning accounting from scratch.
1. Purchase Book (Purchases Journal)
Meaning
A Purchase Book, also known as the Purchases Journal, is a subsidiary book used to record credit purchases of goods only.
Here, goods means items purchased for the purpose of resale, not for use in the business.
What is Included in Purchase Book?
- Credit purchases of goods
- Purchases made from suppliers on credit
What is Not Included?
- Cash purchases
- Purchase of assets like machinery, furniture, or computers
- Purchase of expenses
In simple terms, whenever goods are purchased on credit, the transaction is recorded in the Purchase Book.
Format of Purchase Book
| Date | Supplier Name | Invoice No. | Details | Amount (₹) |
Practical Illustration (December 2025)
On 5 December 2025, goods were purchased on credit from Sharma Traders for ₹40,000.
| Date | Supplier Name | Invoice No. | Details | Amount |
| 05-12-2025 | Sharma Traders | ST/145 | Goods purchased | 40,000 |
Journal Entry (Posted from Purchase Book)
Purchases A/c Dr. 40,000
To Sharma Traders A/c 40,000
Narration:
Being goods purchased on credit from Sharma Traders.
2. Difference Between Purchase Book and Purchase Account
Students often confuse these two terms, but they serve different purposes.
| Basis | Purchase Book | Purchase Account |
| Nature | Subsidiary book | Ledger account |
| Purpose | Records daily credit purchases | Shows total purchases |
| Entries | Supplier-wise details | One consolidated amount |
| Balance | No balance | Appears in Trial Balance |
| Role | Book of original entry | Final account |
👉 Transactions are first recorded in the Purchase Book and later posted to the Purchase Account.
3. Purchase Return (Return Outward)
Meaning
When goods purchased on credit are returned to the supplier, the transaction is known as Purchase Return or Return Outward.
This usually happens when:
- Goods are damaged
- Quality is not as per requirement
- Wrong goods are supplied
- Excess quantity is delivered
Purchase returns reduce the amount payable to the supplier.
Format of Purchase Return Book
| Date | Supplier Name | Debit Note No. | Details | Amount (₹) |
Practical Illustration (December 2025)
On 10 December 2025, goods worth ₹6,000 were returned to Sharma Traders.
| Date | Supplier Name | Debit Note No. | Details | Amount |
| 10-12-2025 | Sharma Traders | DN/12 | Goods returned | 6,000 |
Journal Entry for Purchase Return
Sharma Traders A/c Dr. 6,000
To Purchase Return A/c 6,000
Narration:
Being goods returned to Sharma Traders.
4. Debit Note – Concept and Meaning
What is a Debit Note?
A Debit Note is a document issued by the buyer to the supplier when:
- Goods are returned
- Supplier has charged excess amount
- Defective goods are supplied
By issuing a Debit Note, the buyer informs the supplier that his account has been debited, and the amount payable has been reduced.
Who Issues a Debit Note?
- Buyer issues Debit Note
- Seller issues Credit Note (opposite situation)
Simple Format of Debit Note
Debit Note No: DN/12
Date: 10-12-2025
| Particulars | Amount (₹) |
| Goods returned | 6,000 |
Accounting Impact of Debit Note
- Supplier’s account is debited
- Purchase Return account is credited
- Business liability decreases
5. Complete Accounting Flow (December 2025 Example)
- Credit purchase recorded in Purchase Book
- Posting made to Purchase Account
- Goods returned entered in Purchase Return Book
- Debit Note issued to supplier
- Journal entry passed with narration
This is the actual accounting flow followed in real businesses.
6. Key Exam-Oriented Points
- Purchase Book records credit purchases of goods only
- Purchase Account shows total purchases
- Purchase Return means goods returned to supplier
- Debit Note is issued by the buyer
Conclusion
Understanding Purchase Book, Purchase Return, and Debit Note builds a strong accounting foundation. These concepts are not only important for Class 11 examinations, but also play a crucial role in business accounting, GST compliance, and ledger management.
This completes Day 23 of the 50 Days Accounting Challenge by CA Devesh Thakur, aimed at making accounting simple, logical, and practical for students and beginners.
