Differences between sales and purchases day book

In this article we consider the differences between sales and purchases day book. Generally, people will think that a sales day book is for sales and a purchase journal is for purchases. They are right! However, they are limited. Both journals are meant for credit transactions. Follow through, as we explain the similarities and differences between these two terms.

1. Five Similarities between sales and purchases day book

Below are five similarities between sales and purchases day book.

1.1 Subsidiary Books

Sales and purchases day books are books of original entry. Also, referred to as subsidiary books. They are used to record business transactions first before they are posted to their respective ledger accounts.

1.2 Source Document

The invoice is the only source document used to record transactions in the sales and purchases journal. Other commercial documents such as receipts and vouchers are not required.

1.3 Requires evidence

Evidence must be provided before transactions are recorded to these subsidiary books. Without evidence, the data entry officer will be held accountable. And may be called to answer questions. However, with proper evidence such as the invoices, the books will speak for themselves.

1.4 Used by large entities

Sales and purchases journals are used mainly by large entities. Smaller firms rely on the general journal to carry out their transactions. 

1.5 Record credit transactions

Both books of original entry are used to record credit transactions. Cash transactions trading partners do not go through these books. Instead, a cash book is used to record cash transactions. 

2. Four Differences between sales and purchases day book

Below are the five differences between sales and purchases journal:

2.1 Source documents

The sales journal requires a sales invoice as its source document. However, the purchase journal used the purchase invoice. It is the suppliers or vendors that issued the purchases invoice. While the sales invoice is received by the customer. Therefore, a single invoice can serve as both sales and purchases. Depends on if the individual or entity is a buyer or seller.

2.2 Usage

Sales day book is used for recording credit sales transactions. While purchases day book is for credit purchases. Cash sales and purchases do not enter into the subsidiary books. 

2.3 Double entry

The double entry for sales journal is to debit individual debtors a/cs and credit sales account. However, for purchase journals, the double entry is to debit purchases accounts and credit the individual creditors accounts.

2.4 Ledger type

The ledger type for sales day book is the general ledger and account receivables. But for purchases day book, it is the general ledger and account payables.

3. Conclusion

In final words, the main difference of the sales and purchases day book is the record of credit sales and credit purchases. While they use invoices as their source document and evidence, the books are mostly used by large entities.