Table of Contents
Purchase Book Or Purchase Journal
Purchase Book Or Purchase Journal
Purchase Book Or Purchase Journal?
Purchase book is a book of original entry. All credit purchases of goods are recorded in the purchase Book (purchase Journal) whereas cash purchases of goods are recorded in the cash book. Credit purchases of other assets like, office equipment, furniture, building, plant, and machinery are not recorded in the Purchase book; they are recorded in the journal proper. Purchase book is also known as a ‘Purchase journal’ or ‘Invoice book’ or ‘Purchase daybook’ or ‘Inward Invoice Book’.
The entries in the purchase book are made on the basis of purchase vouchers like purchase invoices or Bills issued by the Suppliers.
Key Points
l. Only credit purchases of goods are recorded in the purchase book.
2. Cash purchases of goods are not recorded in the purchase book.
3. Cash purchases of goods are recorded in the Cash Book.
4. Cash purchases of Assets are not recorded in the purchase book.
5. Cash purchases of Assets are recorded in the Cash Book.
6. Goods received on consignment are not recorded in the purchase book.
7. Credit purchases of Assets are not recorded in the purchase book.
8. Credit purchases of Assets are recorded in the journal proper.
9. Goods mean the items or articles in which the business enterprise is dealing.
10. Purchase book is a sub-division of the journal.
Format of Purchase Book
1. Date: In this column Year, Month, and Date of transactions on which goods were purchased on credit shall be recorded in chronological order.
2. Invoice No. : In this column, the Invoice number is written.
3. Name of Suppliers: In this column, the Name of the person/Supplier from whom the goods were purchased on credit, shall be written along with detailed description of goods viz, quantity, quality, rate, gross amount trade discount, and GST.
4. L.F.: In this Column, page number of the ledger book in which Suppliers account is maintained.
5. Detail: For each item, the amount is recorded in the detail column, after totaling the amount of purchase from one Supplier, and the trade discount, if any is deducted.
6. Amount: In this column, the net amount payable to the Supplier shall be recorded. The total of this column represents the total credit purchase of goods shall be transferred to the debit side of the purchase account.
Also read : Double Column Cash Book (Cash and Bank)
Purchase Book Or Purchase Journal
Example:
Record the following transactions for the Month of August 2021 in the Purchase Book of M/s Hansha Electronics :
August 5, 2021:
Purchased from M/s.Naresh Electronics (Invoice No. 250) 10 Colour T.V @ ₹ 20,000 per piece. Trade Discount on all items @20%.
August 10, 2021:
Purchased from M/s Capital Electronics: (Invoice No. 825) 20 Voice Recorders @₹ 2,500 per piece Trade Discount 10% .
August 12, 2021:
Furniture Purchased for cash ₹ 20000. Trade Discount on all items @12%.
August 17, 2021:
Purchased from M/s. East Electronics: (Invoice No. 450) 15 Stereos @ ₹ 4,000 per piece, 5 Color T.V. 14′′ @ ₹10,000 per piece Trade Discount @10%.
August 27, 2021:
Purchased for cash 10 Colour T.V @ ₹ 10000 per piece. Trade Discount on all items @20%.
August 31, 2021:
Machinery Purchased on credit from HMT ₹2,00,000.
Solution:
Note:
August 12, 2021:
Furniture Purchased for cash ₹ 20000. Trade Discount on all items @12%.
(Cash purchases of Assets are not recorded in the purchase book.)
August 27, 2021:
Purchased for cash 10 Colour T.V @ ₹ 10000 per piece. Trade Discount on all items @20%
(Cash purchases of goods are not recorded in the purchase book.)
August 31, 2021:
Machinery Purchased on credit from HMT ₹2,00,000.
(Credit purchases of Assets are not recorded in the purchase book.)
Purchase Book Or Purchase Journal
Question For Practice:
Question 1
Record the following transactions for the Month of August 2021 in the Purchase Book of M/s AADI COMPUTERS :
August 1, 2021:
Purchased from M/s.BHARAT COMPUTERS (Invoice No. 1250) 18 p.c. @ ₹ 28,000 per piece. Trade Discount @20%.
August 8, 2021:
Purchased from M/s KAILASH COMPUTERS: (Invoice No. 1825) 100Laptop @₹ 32,500 per piece Trade Discount 10%.
August 12, 2021:
Plant Purchased for cash ₹ 55,000.
August 19, 2021:
Purchased from M/s. VIJAYA COMPUTERS: (Invoice No. 1450) 10 P.C.@ ₹ 34,000 per piece, Trade Discount @11%. 15 Tablet @ ₹18,500 per piece, Trade Discount @15%.
August 22, 2021:
Purchased for cash 30 laptop@ ₹ 11,000 per piece. Trade Discount @20%.
August 31, 2021:
Machinery Purchased on credit from HMT ₹2,00,000.
Question 2
Enter the following transactions in the Purchases Book of M/s LUCKY Stationery Mart of July 2021,
July 01, 2021, Purchased from M/s.Sanjay Stationers as per Invoice No. 4131
140 Paper Rim @ ₹ 300 Per Rim.
160 Simple Books @ ₹ 120 Each
200 Pkt Pencils @ ₹ 150 Per packet.
July 10, 2021, Bought from M/s Nishika Paper Mart as per Invoice No. 1212
500 Files @ ₹ 20 per file
Trade Discount @ 15% on purchases.
July 18, 2021, Purchased from M/s. Rahul Stationers as per Invoice No. 2211
800 Drawing Paper @ ₹ 40 each
200 Pkt Pencil Color @ ₹ 20 per packet.
Trade Discount 15%.
July 20, 2021, Purchased from M/s. Stationery Zone as per Invoice No. 1783
200 packet Pens @ ₹ 100 per packet.
Trade Discount 10%
July 24, 2021, Purchased form M/s. Amit Paper Mart as per Invoice No. 2340
100 packet water Color @ ₹50 per packet.
50 packet Paint Brushes @ ₹ 40 per packet.
Trade Discount 10%
July 30, 2021, Bought from M/s Vijeta File Trader as per Invoice No. 2321
200 Plastic Files @ ₹25 per file
Trade Discount 10%
Question 3
Enter the following transaction in the Purchase Book of M/s Sanjeet Stationers.
2021
Aug.1 Brought from Oswal Book House (Invoice No. 305)
50 Dozen Pencils @ ₹ 40 per dozen
60 Dozen Ball pens @ ₹ 10 per pen
Trade discount @ 20%
Aug.5 Brought furniture of ₹ 50,000 on credit from M/s Godrej interio (Invoice No. 1090)
Aug.8 M/s Sanjay Bros, sold to us (Invoice No. 626)
300 Registers @ ₹100 each
500 Note Books @ ₹ 40 each
Aug.17 Brought from VEDA stationers : (Invoice No. 1001)
800 Refills @ ₹ 10 each
100 Ink pads @ ₹ 20 each
Trade discount @ 10%
Aug.25 Brought from VEDA stationers f : (Cash Memo No. 1021)
500 Refills @ ₹ 8 each
100 Ink pads @ ₹ 15 each
Trade discount @ 10%
