Purchases journal

Definition

A purchases journal is a special journal used to record all credit purchases of merchandise. It helps in organizing and summarizing purchase transactions for accounting purposes.

5 Must Know Facts For Your Next Test

1. Purchases journals typically include columns for the date, supplier name, invoice number, and amount.
2. Only credit purchases are recorded in a purchases journal; cash purchases are recorded separately.
3. The total from the purchases journal is posted to the general ledger at the end of an accounting period.
4. Using a purchases journal improves efficiency by reducing the volume of entries in the general ledger.
5. Stakeholders such as accountants and auditors rely on the accuracy of the purchases journal for financial reporting.

Review Questions

Related terms

General Ledger:

The primary accounting record where all financial transactions are summarized.

Accounts Payable:

The amount of money owed by a company to its creditors for goods or services purchased on credit.

Special Journals:

Journals used to record specific types of transactions such as sales, cash receipts, and purchases.