What do you mean by purchase

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             Purchase Book 📚 is one among the important subsidiary Books 📚. It is also known as Brought book or Invoice journal or purchase journal. This purchases book 📚 is meant to record all Credit purchases of goods and Merchandise in which the trader deals. It should be remembered that this book 📚 strictly prohibits Recording of either cash purchases of goods or cash as well as Credit purchases of assets like Buildings, Furniture and fittings, machinery etc., and also any other expenditure incurred on the purchases. Transactions relating to cash purchases are entered in the cash book 📚. For example, if furniture is purchased on Credit the transaction should not be entered in the purchases book 📚. For example, if furniture is purchased on Credit the transaction should not be entered in the purchases book because the furniture is not intended for sale. This book is also styled as purchases day book 📚 or credit purchases book or purchases Register.


       When goods are purchased on Credit the supplier of goods (creditor) sends the invoice to the trade  either along with the goods or in advance. 

        The invoice which is popularly known as bill. Since, the invoice gives us details of goods sent by the creditor, the goods actually received must be checked up with quantities, sizes etc., Shown in the invoice. The invoice itself must be checked to see that the rates changed for the goods supplied are correct (by comparing with original order form) and that the calculations are correct, After through checking of invoice, particulars there in must be entered in the purchases book 📚. Afterwards all invoices must be properly field and each invoice is given a consecutive a number for easy References in future.


           The following is the Proforma of invoice.

        Proforma of invoice

Telegraphic Address 42, Eskimo Street,

Sunex  Delhi-4

Telephone 📞 no- 663366 24-1-1994


            



    


After checking up the invoice, the particulars there in must be entered in purchases book 📚. The following is the Proforma of the purchases Book 📚.




1) The first column is meant to record the date of Credit purchase of goods.


2) The second column is meant to record the name of the party from whom goods are purchased on Credit.


3) The third column is meant to record the ledger folio of the supplier.


4) The fourth column is meant to record the value of goods purchased. The total of this book 📚 gives us the total Credit purchases and in other words the total Creditors at any point of time.


Posting from the purchases Book 📚:-

Separate accounts must be opened for every supplier of goods and a purchases Account. The net amount of invoices will be posted to the ledger as follows.

1) Debit the purchases account with the periodical total.

2) Credit the personal accounts of the suppliers with the individual accounts.



  



           




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