Recording of Transactions-II

All credit purchases of goods are recorded in the purchases journal whereas cash purchases are recorded in the cash book. Other purchases such as purchases of office equipment, furniture, building, are recoded in the journal proper if purchased on credit or in the cash book if purchased for cash. The source documents for recording entries in the book are invoices or bills received by the firm from the supplies of the goods. Entries are made with the net amount of the invoice.

Trade discount and other details of the invoice need not be recorded in this book. The format of the purchases journal is shown in figure . . Purchases (Journal) Book Invoice Name of Supplier No.

(Account to be credited) Fig. . : Format of purchases (journal) book The monthly total of the purchases book is posted to the debit of purchases account in the ledger. Individual suppliers accounts may be posted daily.