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    The purchases journal is used to record credit purchases such as merchandise, supplies, equipment, and other goods bought on credit terms. It contains the date of purchase, details of the items bought from each supplier like quantity and description, the supplier invoice number, the ledger folio to track the running balance, and the total amount owed to the supplier. Entries in the purchases journal include item details in one column, discounts or other adjustments in another, and the net total payable to the supplier in the last column. This allows tracking of individual purchases and suppliers as well as the overall accounts payable balance over time.

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    The purchases journal is used to record credit purchases such as merchandise, supplies, equipment, and other goods bought on credit terms. It contains the date of purchase, details of the items bought from each supplier like quantity and description, the supplier invoice number, the ledger folio to track the running balance, and the total amount owed to the supplier. Entries in the purchases journal include item details in one column, discounts or other adjustments in another, and the net total payable to the supplier in the last column. This allows tracking of individual purchases and suppliers as well as the overall accounts payable balance over time.

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    © All Rights Reserved
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    10 views4 pages

    PA Tutorial3

    Uploaded by

    Evelyn Harvett
    The purchases journal is used to record credit purchases such as merchandise, supplies, equipment, and other goods bought on credit terms. It contains the date of purchase, details of the items bought from each supplier like quantity and description, the supplier invoice number, the ledger folio to track the running balance, and the total amount owed to the supplier. Entries in the purchases journal include item details in one column, discounts or other adjustments in another, and the net total payable to the supplier in the last column. This allows tracking of individual purchases and suppliers as well as the overall accounts payable balance over time.

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    © All Rights Reserved
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    of 4

    GROUP 2 TUTORIAL 3

    QUESTION 1 What is purchases journal?


    Explain briefly its format.

    Definition of purchases journal


    (Also called purchase day book)
    Used to record credit purchases such as
    merchandise for resale to customers,
    business supplies, equipment, and other
    such purchases. (Cash purchases are not
    recorded here, they belong in the cash
    payments journal)

    Format of purchases journal


    All the credit purchases are listed based on dates of
    purchases. Usually the purchase invoice numbers are
    listed (invoice numbers are not in sequence as each
    supplier has its own numbering system)
    First column- date
    Second column- the name of the supplier,
    quantity of each article bought, description of the article are recorded.
    Sometimes a separate column to record the details of the transactions
    is added in the purchases day book.
    Third column- invoice number.
    Fourth column- ledger folio.
    Last column- total amount to the supplier.

    Study of format of purchases journal


    Purchases Journal

    Invoic
    Dat Particul
    e
    e
    ars
    numb
    er

    Amount

    Ledger
    folio

    Detail(RM)

    Total(RM)

    Details column - the amount of goods purchased and amount of trade discounts
    are entered.
    Total column - the net price of goods (after adjusting discount and expenses),
    that is, the amount of payable to the creditors will have to be recorded.

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