Question

type of journal a record inpurchase journal?

Answer 1

During the normal course of business, many companies will purchase items on credit. When items are purchased on credit or on account, the transaction is recorded in the accounting records in the purchases journal. A purchases journal is a specialized type of accounting log that keeps track of orders made by a business on credit or on account. Cash purchases for inventory are not tracked in the purchases journal.

The amount of detail provided in a purchases journal is determined by the type of purchase and products received. Individual items are not usually recorded if they are small amounts and purchased with other items. Neither does the purchases journal track the amount of money owed on account to a supplier.

For instance, if you own a furniture store and make an order for 10 sofas on account, the order will be reflected as a journal entry that will include one debit and one credit; the sofas will not be individually recorded in the purchases journal as 10 separate entries. Nor will the balance of your account with the furniture supplier show in the purchases journal. In this instance, because the order was for inventory, the posting in the account will be credit to accounts payable and a debit to inventory.