Features of Purchases Book or Purchases Journal
1. Credit purchases of goods traded in or material used for manufacture are recorded in the Purchases Book. Credit purchases of items not dealt in, e.g. office furniture or computers for office use, are not recorded in the Purchases Book.
2. Cash purchases are not recorded in the Purchases Book since they are recorded in Cash Book.
3. The entries in the Purchases Book are made on the basis of invoices received from the seller of goods with the net amount after trade discount.
Invoice: it is a document prepared by
seller and sent to the customer. It shows the goods sold, with description,
quantities, prices and trade discount along with GST (IGST or CGST and SGST)
and expenses payable.
Utilities of Purchases Book
reduces the volume of work required to pass Journal entry for each credit
2. Ledger posting becomes easier since all the credit purchases are recorded in
a single book.
3. It is possible to have a periodic total of credit purchases of goods.
4. It becomes easier to check the price charged and other calculations.
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