Accounting Practices
501
Chapter 4
Purchases journal
Cathy Saenger, Senior Lecturer,
Eastern Institute of Technology © Pearson 2011
Purchases journal
We will now look at the recording of credit
purchases in the Purchases Journal (this will not
only be limited to inventory purchases)
REMEMBER
GST is paid on purchases and our credit supplier accounts
are called Accounts Payable
Ch4B - Purchases journal
2
Purchases Journal
Date Details
Accounts
Ref payable
GST
paid
Purchases
Tel
Sundry
We can use one column called Sundry for items that do
not occur frequently
Ch4B - Purchases journal
3
Purchases Journal
Date Details
Accounts
Ref payable
Cr
GST
paid
Dr
Purchases
Dr
Tel
Dr
Sundry
Dr
By now (because they are colour-coded!) we know which
accounts are Debit and which are Credit
Let’s do a few transactions to check out this journal
Ch4B - Purchases journal
4
Purchases Journal
Date Details
1 AB Ltd
Accounts
Ref payable
Cr
65
3,680
GST
paid
Dr
Purchases
Dr
480
Tel
Dr
Sundry
Dr
3,200
3680  23 x 3
Apr 1 : Purchased goods on credit from AB Ltd, $3,680,
inv 65
We have to account for GST on purchases
Ch4B - Purchases journal
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Purchases Journal
Date Details
1 AB Ltd
2 Telecom
Accounts
Ref payable
Cr
65
91
3,680
276
GST
paid
Dr
Purchases
Dr
480
36
Tel
Dr
Sundry
Dr
3,200
240
276  23 x 3
Apr 2 : Received Invoice from Telecom, $276, inv 91
We have to account for GST on Telephone expense
Ch4B - Purchases journal
6
Purchases Journal
Date Details
1 AB Ltd
2 Telecom
3 XY Ltd
Accounts
Ref payable
Cr
65
91
76
3,680
276
8,280
GST
paid
Dr
Purchases
Dr
480
36
1,080
Tel
Dr
Sundry
Dr
3,200
240
7,200
8280  23 x 3
Apr 3 : Purchased goods from XY Ltd, $8,280, inv 76
We have to account for GST on purchases
Ch4B - Purchases journal
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Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
65
91
76
16
3,680
276
8,280
552
GST
paid
Dr
Purchases
Dr
480
36
1,080
72
Tel
Dr
Sundry
Dr
3,200
240
7,200
480
552  23 x 3
Apr 4 : Received the monthly invoice from Ace Power for
electricity, $552, inv 16
We have to account for GST on electricity
Ch4B - Purchases journal
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Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
65
91
76
16
GST
paid
Dr
Purchases
Dr
3,680
276
8,280
552
480
36
1,080
72
3,200
$12,788
$1,668
$10,400
Tel
Dr
Sundry
Dr
240
7,200
480
$240
$480
We now find the totals of each column
Ch4B - Purchases journal
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Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
65
91
76
16
GST
paid
Dr
Purchases
Dr
3,680
276
8,280
552
480
36
1,080
72
3,200
$12,788
$1,668
$10,400
Tel
Dr
Sundry
Dr
240
7,200
480
$240
$480
The Accounts Payable control account will be credited with the total of
$12,788
The GST Paid account will be debited with the total of $1,668
The Purchases account will be debited with the total of $10,400
The Telephone account will be debited with the total of $240
The amounts in the Sundry column will be debited to the individual
accounts
The individual suppliers (Acc Payable) will be credited with the individual
amounts we owe them
Ch4B - Purchases journal
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Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
65
91
76
16
GST
paid
Dr
Purchases
Dr
3,680
276
8,280
552
480
36
1,080
72
3,200
$12,788
$1,668
$10,400
Tel
Dr
Sundry
Dr
240
7,200
480
$240
$480
Let’s do some of the postings to the General Ledger
Ch4C - PJ cont
11
Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
GST
paid
Dr
3,680
276
8,280
552
480
36
1,080
72
3,200
$12,788
$1,668
$10,400
65
91
76
16
Tel
Dr
Purchases
Dr
Sundry
Dr
240
7,200
480
$240
$480
General Ledger
Date
Details
Ref no
Dr
Cr
Balance
12,788
12,788 Cr
ACC PAY CONTROL
30
Purchases Jnl
PJ1
Ch4C - PJ cont
12
Purchases Journal
Date Details
1
2
3
4
AB Ltd
Telecom
XY Ltd
Ace Power
Accounts
Ref payable
Cr
65
91
76
16
GST
paid
Dr
Tel
Dr
Purchases
Dr
3,680
276
8,280
552
480
36
1,080
72
3,200
$12,788
$1,668
$10,400
Sundry
Dr
240
7,200
480
$240
$480
General Ledger
Date
Details
Ref no
Dr
Cr
Balance
GST Paid
30
Purchases Jnl
PJ1
1,668
1,668 Dr
10,400
10,400 Dr
PURCHASES
30
Purchases Jnl
PJ1
Ch4C - PJ cont
13
And … another flutter of
the heart!
Ch4C - PJ cont
14