Subsidiary Purchase Journal: A Comprehensive Guide

The Subsidiary Purchase Journal is a specialized accounting record used to track and document all purchases of goods and services on credit. This journal details each purchase transaction, making it easier to manage accounts payable and monitor spending.

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How to Fill the Subsidiary Purchase Journal for BIR Compliance

 

To ensure compliance with the Bureau of Internal Revenue (BIR) in the Philippines, the Subsidiary Purchase Journal should be filled out accurately and consistently. Here’s a step-by-step guide:

Use a Bound Journal Book:

Use a bound and paginated journal book to maintain the integrity of records.

Column Headers:

Common columns in the Subsidiary Purchase Journal include:

Date

Supplier

Invoice Number

Reference Number

Description

Accounts Payable (Credit)

Purchases (Debit)

Other Accounts (if applicable)

Record Transactions Promptly:

Record each purchase transaction as it occurs to ensure the journal is up-to-date.

Complete Information:

Ensure each entry includes the date, supplier name, invoice number, reference number, a brief description of the purchase, and the amounts debited and credited.

Debit and Credit Entries:

For each purchase, debit the Purchases account and credit the Accounts Payable account.

Attach Source Documents:

Attach or reference source documents such as purchase invoices and receipts for each entry.

Consistent Format:

Use a consistent format for all entries to ensure clarity and uniformity.

 

Sample Subsidiary Purchase Journal Entries

Here’s an example of how to record transactions in the Subsidiary Purchase Journal for BIR compliance, covering transactions for a fictional business, PBC, for the period January to March 2024.

Subsidiary Purchase Journal of PBC

For the Period January to March 2024

Date	Supplier	Invoice Number	Reference Number	Description	Accounts Payable (Credit)	Purchases (Debit)	Other Accounts (if applicable)
Jan 05	Supplier A	INV-1001	PUR-001	Purchase of raw materials	500,000	500,000
Jan 15	Supplier B	INV-1002	PUR-002	Purchase of office supplies	50,000	50,000
Feb 05	Supplier C	INV-1003	PUR-003	Purchase of machinery	1,000,000	1,000,000
Mar 10	Supplier D	INV-1004	PUR-004	Purchase of inventory stock	600,000	600,000

Detailed Entries:

 

January 2024

Date: January 5

 

Supplier: Supplier A

Invoice Number: INV-1001

Reference Number: PUR-001

Description: Purchase of raw materials

Accounts Payable (Credit): 500,000 PHP

Purchases (Debit): 500,000 PHP

Date: January 15

 

Supplier: Supplier B

Invoice Number: INV-1002

Reference Number: PUR-002

Description: Purchase of office supplies

Accounts Payable (Credit): 50,000 PHP

Purchases (Debit): 50,000 PHP

 

February 2024

 

Date: February 5

 

Supplier: Supplier C

Invoice Number: INV-1003

Reference Number: PUR-003

Description: Purchase of machinery

Accounts Payable (Credit): 1,000,000 PHP

Purchases (Debit): 1,000,000 PHP

 

March 2024

 

Date: March 10

 

Supplier: Supplier D

Invoice Number: INV-1004

Reference Number: PUR-004

Description: Purchase of inventory stock

Accounts Payable (Credit): 600,000 PHP

Purchases (Debit): 600,000 PHP

Key Points for BIR Compliance:

Accuracy:

Ensure all figures are accurate and match the supporting documents.

Timeliness:

Record transactions as they occur to keep the journal up-to-date.

Completeness:

Do not leave blank spaces or lines between entries to prevent unauthorized insertions.

Legibility:

Ensure all entries are clear and legible. Corrections should be done properly with a single line strike-through and initialed by the responsible person.

Supporting Documents:

Keep all related documents (invoices, receipts, etc.) organized and easily accessible for audit purposes.

By following these guidelines, the Subsidiary Purchase Journal will meet BIR compliance standards and provide a reliable record of all purchase transactions.

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