Question

Why Books purchased is not written in the income and Expenditure Account?

Answer 1

Book purchased is a capital nature expense, hence it is not written in the income and expenditure account.

About income and expense account:

• expense and income related to nominal nature are included in the income and expense account.
• Books are the expense of capital nature and it will be included in the asset side of the balance sheet.

Journal entry:

• If it is purchased in cash.

Books A/C dr.

To Cash account

• If it is purchased in credit.

Books A/C dr.

To Cash account

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Answer 2

1. The income and expenses account records all nominal transactions.
2. Any capital-related transactions are not recorded in the income and expenses account.
3. Because purchasing a book is a capital expense, it is not recorded in the income and expenditure account.
4. Books are a capital expense that will be recorded on the asset side of the balance sheet.

Hence, books purchased are not written in the income and expenditure account.

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