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Purchases (Journal) Book

All credit purchases of goods are recorded in the purchases journal while 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. 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 4.6.
Purchases (Journal) Book

Date

Invoice

No.

Name of supplier

(Account to be Credited)

L.F.

Amount

Rs.

 

 

 

 

 

Fig. 4.6 : 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.

 

Problem#5
Consider the following details obtained from M/s Kanika Traders and observe how the entries are recorded in the purchase journal.

Date

Details

2005

Aug. 04




Aug. 10

 
 


Aug. 18


 


Aug. 26

 



Aug. 29

 

Purchased from M/s Neema Electronics (invoice no. 3250): 20 Mini-size T.V. @ Rs.2,000 per piece, 15 Tape recorders @ Rs. 12,500 per piece. Trade discount on all items @ 20%.

Bought from M/s Pawan Electronics (invoice no. 8260): 10 Video cassettes @ Rs. 150 per piece, 20 Tape recorders @ Rs. 1,650 per piece. Trade discout @ 10% on purchases.


Purchased from M/s. Northern Electronics (invoice no. 4256): 15 Northern stereos @ Rs. 4,000 per piece, 20 Northern colour T.V. @ Rs. 14,500 per piece. Trade discount @ 12.5%.


Purchased form M/s Neema Electronics (Invoice No. 3294): 10 Mini-size T.V. @ Rs. 1,000 per piece, 5 Colour T.V. @ Rs. 12,500 per piece. Trade discount @ 20%.


Bought from M/s Pawan Electronics: (Invoice No. 8281) 20 Video cassettes @ 150 per piece 25 Tape recorders @ Rs. 1,600 per piece. Trade discount @ 10% on purchases.


Solution:
Books of Kanika Traders
Purchases (Journal) Book

Date

Invoice

No.

Name of supplier

(Account to be Credited)

L.F.

Amount

Rs.

2005

Aug.04

Aug.10

Aug.18

Aug.26

Aug.29

Aug.31

 

 

3250

8260

4256

3294

8281

 

 

Neema Electronics 1,82,000

Pawan Electronics 31,050

Northern Electronics 3,06,250

Neema Electronics 54,000

Pawan Electronics 38,700

 

 

1,82,000

31,050

3,06,250

54,000

38,700

_________

6,12,000

________

 

Posting from the purchases journal is done daily to their respective accounts with the relevant amounts on the credit side. The total of the purchases journal is periodically posted to the debit of the purchases account normally on the monthly basis. But, if the number of transactions is very large, this may be done and posted daily, weekly or fortnightly.

 

The posting from the purchases journal to the ledger from is illustrated as follows:
Books of Kanika Electronics
Neema Electronics
Dr. Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

Particulars

J.F.

Amount

Rs.

       

2005

Aug 04

Aug 26

 

Purchases

Purchases

 

 

1,82,000

54,000


Pawan Electronics

Date

Particulars

J.F.

Amount

Rs.

Date

Particulars

J.F.

Amount

Rs.

       

2005

Aug 10

Aug 29

 

Purchases

Purchases

 

 

31,050

38,700


Northern Electronics
Dr. Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

Particulars

J.F.

Amount

Rs.

       

2005

Aug 18

 

Purchases

 

 

3,06,250


Purchases Account
Dr. Cr.

Date

Particulars

J.F.

Amount

Rs.

Date

Particulars

J.F.

Amount

Rs.

2005

Aug 31

Sundries as per purchases journal

 

6,12,000

       




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