What is purchase book?
Purchases (journal) book is also a book of original entry. This book records only credit purchases of goods in which the firm deals. Cash purchases of goods are recording the cash book. Credit purchases of items not for resale are not recorded in the Purchases Book e.g, If a firm deals in Computer parts, any item of furniture purchased on credit is not recorded in this book. These are recorded in another book which is known as ‘journal proper’.
In case of Purchase of goods on credit, an Invoice or Bill prepared by the supplier is received. It contains information about the date of transaction, details of items purchased at List Price less trade discount, if any, Invoice Number, and the net amount payable. Trade discount and other details of invoice need not be recorded in this book. Format of Purchases Book is as under: