AccountsISC Class 11 · Subsidiary Books and Cash Book

Petty Cash Book and Purchases, Sales and Returns Books: ISC Class 11 Accounts

Updated 17 October 2026 · Fact-checked

Subsidiary books split the journal by kind of transaction: the purchases book (credit purchases of goods), sales book (credit sales), purchases returns and sales returns books, and the journal proper for the rest. The petty cash book records small payments by the petty cashier on the imprest system: a fixed sum is given, expenses are analysed in columns, and the amount spent is reimbursed so the imprest is restored.

Each book's total goes to one account: Purchases Dr, Sales Cr, Purchases Returns Cr, Sales Returns Dr. Each supplier and customer is posted separately.

Illustration drawn for QuestionBuddy.

Understand Petty Cash Book and the Purchases, Sales and Returns Books

Subsidiary books. Books of original entry for particular groups of transactions: cash book, purchases book, sales book, purchases returns (returns outward) book, sales returns (returns inward) book, bills receivable and payable books, and the journal proper. Advantages: division of labour, saves time, easy reference, and fewer ledger postings (totals are posted).

Purchases book. Records credit purchases of goods for resale only. Trade discount is deducted in the book; only the net amount is entered. Posting: each supplier's account is credited with the net amount individually; Purchases A/c is debited with the total of the book at the end of the period.

Sales book. Records credit sales. Posting: each customer is debited; Sales A/c is credited with the total.

Purchases returns book. Goods returned to suppliers: supplier debited, Purchases Returns A/c credited with the total. Sales returns book: goods returned by customers: Sales Returns A/c debited with the total, customer credited.

Journal proper. For items not recorded elsewhere: opening entry, closing entries, adjustment entries, rectification, credit purchase of assets, bad debts written off.

Petty cash book. Maintained by the petty cashier. *Imprest system:* the cashier gets a fixed amount (imprest) at the start of a period; at the end, the amount spent is reimbursed so that the cash in hand is again the imprest. *Analytical petty cash book:* amounts are distributed under heads (postage, conveyance, stationery, refreshments, sundry). Total spent = reimbursement. At the end, the total of each analysis column is debited to the respective expense account and the total payments credited to cash.

Check. Closing petty cash = Opening imprest + Reimbursement - Total payments; at the end of the period after reimbursement it equals the imprest.

Petty Cash Book and the Purchases, Sales and Returns Books: key facts

Net purchases: Net purchases = Purchases - Purchases returns | Trade discount deducted at entry; Net amount in the book.
Imprest: Reimbursement = Total payments in the period | Cash in hand returns to the imprest; Imprest system.
Petty cash balance: Balance c/d = Opening balance + Cash received - Payments | Equals the imprest after reimbursement; Check figure.

How to answer Petty Cash Book and the Purchases, Sales and Returns Books questions

Use totals for subsidiary books and analyse each payment for petty cash.

1Subsidiary books: enter net amounts and total them.
2Post individual accounts and the totals to the ledger.
3Petty cash: enter each payment in the total column and the proper analysis column.
4Total all columns, find the balance and the reimbursement.

Petty Cash Book and the Purchases, Sales and Returns Books in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Imprest system

Suppose an office gives its petty cashier Rs 5,000 on Monday. By Friday the cashier has spent Rs 3,150 on tea, postage and travel.

How much is reimbursed on Friday and what is the cash in hand afterwards?

Try it first, then show the solutionSolution

Cash left = 5,000 - 3,150 = 1,850.
Reimbursement = 3,150, restoring cash to 5,000.

Answer: Reimbursement Rs 3,150; cash in hand Rs 5,000 again.

Memory hook: Reimburse exactly what was spent.

Tricks to remember Petty Cash Book and the Purchases, Sales and Returns Books

Short memory aids. Say each one aloud once, then use it on a question the same day.

Net in, total out
Enter net amounts; post totals to the nominal account.
Use it when: Subsidiary books.
Imprest = fixed float
Refill only what was spent.
Use it when: Petty cash.
Returns reverse
Returns outward reduce purchases; returns inward reduce sales.
Use it when: Returns books.

Petty Cash Book and the Purchases, Sales and Returns Books: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Subsidiary book · 1 mark · MCQBoard level

Credit purchases of goods are recorded in the:
(a) cash book (b) purchases book (c) sales book (d) journal proper

Try it first, then show the solutionSolution

Credit purchase of goods goes to the purchases book.

Answer: (b) purchases book

Example 2: Purchases book and posting · 5 marks · Long answerBoard level

Enter in the purchases book and show the posting: Jan 4 from Ravi goods list price Rs 10,000 less 10% trade discount; Jan 10 from Sita Rs 12,000 less 5% trade discount; Jan 18 from Tara Rs 8,000 (no discount). Jan 12 returned goods of Rs 1,000 (net) to Ravi. (5 marks)

Try it first, then show the solutionSolution

Net amounts: Ravi 9,000; Sita 11,400; Tara 8,000. Total = 28,400.
Posting: Purchases A/c Dr 28,400; Ravi Cr 9,000; Sita Cr 11,400; Tara Cr 8,000.
Return: Ravi Dr 1,000, Purchases Returns Cr 1,000. Ravi owes 9,000 - 1,000 = 8,000. Net purchases = 27,400.

Answer: Purchases book total Rs 28,400; returns Rs 1,000; net purchases Rs 27,400; Ravi's balance Rs 8,000 Cr.

Example 3: Analytical petty cash book · 7 marks · Long answerHarder board level

The imprest is Rs 5,000. Payments during the week: Mon postage 450, Tue conveyance 600, Wed stationery 900, Thu refreshments 750, Fri conveyance 300, Sat sundry 380 and postage 120. Prepare an analytical petty cash book and find the reimbursement and the closing balance. (7 marks)

Try it first, then show the solutionSolution

Postage 450 + 120 = 570; conveyance 600 + 300 = 900; stationery 900; refreshments 750; sundry 380.
Total payments = 570 + 900 + 900 + 750 + 380 = 3,500.
Closing balance before reimbursement = 5,000 - 3,500 = 1,500.
Reimbursement = 3,500; balance after = 5,000.

Answer:

Head	Rs
Postage	570
Conveyance	900
Stationery	900
Refreshments	750
Sundry	380
Total	3,500

Reimbursement Rs 3,500; closing petty cash Rs 5,000 (Rs 1,500 before reimbursement).

Example 4: Sales book · 5 marks · Long answerHarder board level

Prepare the sales book and the ledger posting: Mar 2 sold to Uma goods list price Rs 15,000 less 20% trade discount; Mar 9 to Vijay Rs 9,000 less 10%; Mar 20 to Uma Rs 6,000. Mar 11 Vijay returned goods worth Rs 1,800 (net). Find the debtors' balances and net sales. (5 marks)

Try it first, then show the solutionSolution

Uma: 12,000; Vijay: 8,100; Uma: 6,000. Sales total = 26,100.
Uma debit total = 18,000. Vijay: 8,100 - 1,800 = 6,300.
Net sales = 26,100 - 1,800 = 24,300.

Answer: Uma owes Rs 18,000; Vijay owes Rs 6,300; net sales Rs 24,300.

Example 5: Petty cash discrepancy · 4 marks · Short answerHOTS / competency

The petty cashier received Rs 6,000 imprest. He claims to have spent Rs 4,150 and holds Rs 1,780 in cash. Find whether the books agree and suggest the likely causes of any difference. (4 marks)

Try it first, then show the solutionSolution

Expected cash = 6,000 - 4,150 = 1,850.
Actual cash 1,780: shortage of Rs 70.
Causes: an unrecorded payment, an arithmetic error or a recorded payment less than actually spent.

Answer: Shortage Rs 70; check vouchers for an unrecorded payment or an error.

Where students lose marks in Petty Cash Book and the Purchases, Sales and Returns Books

The slips examiners see most often, and what to write instead.

Mistake: Entering list price in the purchases book
Ignoring the trade discount.
Wrong working
Ravi 10,000
Right working
Ravi 9,000
Do this: Net amounts only.
Usually costs: 2 marks.
Mistake: Reimbursing the full imprest
Mixing imprest with expenses.
Wrong working
Reimburse 5,000
Right working
Reimburse 3,500
Do this: Only what was spent.
Usually costs: 2 marks.
Mistake: Posting purchases of an asset to the purchases book
Both are credit purchases.
Wrong working
Machinery in the purchases book
Right working
Journal proper
Do this: Purchases book is for goods only.
Usually costs: 1-2 marks.

Exam tips

Show the total of each column and agree it with the cash.
Put posting notes beside subsidiary books.
State which items go to the journal proper.

Practice questions on Petty Cash Book and the Purchases, Sales and Returns Books

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
In an imprest system, the amount reimbursed at the end of a period equals:
(a) the imprest (b) the amount spent (c) the balance in hand (d) zero
Hint
Restores the float.
Answer
(b) the amount spent
Q2 · 3 marks · Short answerBoard level
List any four advantages of subsidiary books. (3 marks)
Hint
Division of labour.
Answer
Division of work among clerks, saves time and labour, easy reference and checking, and only totals need posting.
Q3 · 6 marks · Long answerHarder board level
Enter in the purchases and returns outward books and post: Apr 2 from Dev, list Rs 20,000 less 15% trade discount; Apr 9 from Esha, Rs 14,000 less 10%; Apr 15 returned to Dev goods Rs 1,700 (net); Apr 22 from Dev Rs 6,500. Find the balance of each supplier. (6 marks)
Hint
Dev 17,000.
Answer
Dev: 17,000 + 6,500 = 23,500 less returns 1,700 = Rs 21,800 Cr. Esha: 12,600 Cr. Purchases total = 17,000 + 12,600 + 6,500 = 36,100; net purchases 34,400.
Q4 · 6 marks · Long answerHarder board level
Imprest Rs 8,000. Payments: Mon cartage 700, Tue stationery 1,250, Wed postage 480, Thu tea 620, Fri cartage 540, Sat stationery 1,060. Prepare the analytical petty cash book, the reimbursement and the closing balance before it. (6 marks)
Hint
Total = 4,650.
Answer
Cartage 1,240; stationery 2,310; postage 480; tea 620. Total = 4,650. Closing balance before reimbursement = 3,350; reimbursement = 4,650; balance after = 8,000.
Q5 · 3 marks · Short answerHOTS / competency
A firm debits the Purchases account directly for each credit purchase and does not use a purchases book. Explain two disadvantages with a business making 40 credit purchases a month. (3 marks)
Hint
Posting load.
Answer
There would be 40 separate postings to the Purchases account instead of one monthly total, increasing time and error risk. Checking and finding errors is harder and work cannot be divided among clerks.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Purchases book records?Show answer
Credit purchases of goods.
2.Imprest is?Show answer
A fixed amount for petty cash.
3.Trade discount in books?Show answer
Deducted; net recorded.
4.Total of purchases book is posted to?Show answer
Debit of Purchases A/c.
5.Journal proper records?Show answer
Items not in other books.

Petty Cash Book and the Purchases, Sales and Returns Books: frequently asked questions

Are cash purchases in purchases book?

No, they go to the cash book.

Is petty cash book a ledger?

It is a book of original entry.

Why analytical columns?

To post totals to expense accounts.

Do returns books have totals posted?

Yes.