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Purchases Book
Purchases book also known as Bought Day Book is used to record all credit purchases of goods which are meant for resale in the business. Cash purchases of goods, cash and credit purchases of assets are not entered in this book.
Format
i. Date Column – Represents the date on which the transaction took place.
ii. Particulars Column – This column includes the name of the seller and the particulars of goods purchased.
iii. Inward Invoice No. Column – Reveals the serial number of the inward invoice.
iv. LF. Column – This column shows the page number of the suppliers account in the ledger accounts.
v. Details Column – Reveals the amount of goods purchased and the amount of trade discount.
vi. Total Column – This column represents the net price of the goods, i.e, the amount which is payable to the creditors after adjusting discount and expenses if any.
vii. Remarks Column – Contains any extra information.
At the end of each month, the purchase book is totalled. The total shows the total amount of goods or materials purchased on credit.
Posting and Balancing
Once transactions are properly recorded in purchases journal, they are posted into the ledger. The procedure for posting is stated as under.
Step 1 → Entries will be posted to the credit side of the respective creditors (supplier) account in the ledger by writing “By Purchases A/c” in the particulars column.
Step 2 → Periodic total is posted to the debit of purchases account by writing “To sundries as per purchases book” in the particulars column.
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