Purchase Journal Entries

Purchase Journal Entries 

The purchases are inventory and therefore the purchase a/c debited at the time of purchase and the cash account or account payable is credited as case may be.

When the purchases are made in cash the purchases a/c is debited and cash account is credited and when purchases are made on credit then payable account is credited in place of cash a/c.

 When Purchases Charged as Expense

The purchase are charged as expense account at the time of sale of inventory. 

Example of Cash Purchases

Purchases of 2000 is made on cash.

Purchases A/c  2000 Dr.
Cash        A/c   2000 Cr.

Example of Credit Purchases

Purchases are made on credit for 3000.

Purchases A/c         3000 Dr.
Account payable     3000 Cr.

Example of partly paid Purchases

Purchases are made of 2000 and only paid 1000 to Mr. A

Purchases A/c    2000 Dr.
Cash         A/c    1000 Cr.
A             A/c     1000 Cr.

Example of deferred payment with interest

The purchases are made for 2000 the market value of goods are 1800. The 200 are charged as deferred payment charges.

Purchases A/c            1800 Dr.
Interest     A/c              200 Dr.
Account payable        2000 Cr.