The purchases Journal or Day book is a book of prime resale
are recorded. In a list of transaction credit purchases are distinguished from
cash purchases by having the names of the sellers indicated or by being clearly
stated as such.
In purchases jointed, trade discounts are dedicated from
the gross amount to arrive at the net amount payable. It is also important know
that trade discounts are treated finish and last in the purchases or sales
journals (Note: they have no separate ledger accounts), while cash discounts as
was previously discussed are recorded finish in the cash book and posted to
either cash
discount allowed account or discount received account in the
ledger.
The purchases ledger has column for date of purchases, and
the total amount of purchases invoice number, name of the seller, ledger folio,
details of the amount of purchases information recorded in the purchase journal
extracted from the purchases invoice.
ILLUSTRATION
Record the following transaction in the purchases journal
of Mr. Nkwo in the year 1998 and post them to the ledger.
Time 2: purchased from Odom & Co
55 cartons of swan soap @ N910
per carton
92 cartons of Line soap @ 600 p/carton
41 cartons of Omo @ 650 per carton
nkwo was granted 9½% trade discount.
Time 12: Bought from UAC to D
30 packet Shirts @ 450 each
16 sets of under wears @ 200 per set
23 singlets @ 150 each
he received 5% trade discount
June 28: Bought from Obasi Chibueze & sons
80 dozens of Napkins @ 650 a dozen
22 dozen hand towels @ 560 a dozen
20 dozen face towels @ 260 a dozen
solution:
Mr.Nkwo’s books
PURCHASES JOURNAL
date
|
Invoice No.
|
particulars
|
folio
|
details
|
amount
|
June 2
|
0060
|
Odom & CO
|
6
|
||
55 Cartons Of Swan Soap @
|
50,050
|
||||
92 Cartons Lux soap @
|
55,200
|
||||
41 cartons of Omo @ 41 cartons of Omo @
|
26,650
|
||||
Less: 95% trade discounts (o0.0095x131, 900
|
131,900
|
||||
June 12
|
0063
|
UAC LED:
|
8
|
12,530.50
|
119,36050
|
30 packet shirts @
|
13,500
|
||||
16 sets of under wears @
|
4,800
|
||||
23 singlets @
|
3450
|
||||
Less: 5% trade discount
|
21,750
|
||||
June 28
|
Obasi Chibueze & Sons:
|
1087.5020,662.50
|
|||
80 dozen Napkins @
|
14
|
52,000
|
|||
22 dozen hand towels @ 560 each
|
12,320
|
||||
20 dozen face towels @ 360
|
7,200
|
71,520
|
|||
June
|
Total to purchases APC
|
16
|
211,552
|
LEDGER 3
Dr Odom & co Account.
June2.
purchases 119,369,.50
DR UAC LED Account or
June 28 purchases
71, 520
DR purchases account
or
JUNE 2
sundries 211, 552
TRIAL BALANCES
Particulars
|
folio
|
dr
|
dr
|
Odom & co Lted
|
6
|
119,369,50
|
|
UAC lted
|
8
|
20,662.50
|
|
Obasi chibueze & sons
|
71,520.00
|
||
Purchases account
|
Note: invoice & folio numbers were assumed.