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Purchases Journal: Definition, Example, and Format

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Purchases Journal: Definition, Example, and Format

Purchases Journal is a journal of all your purchases that you make. You would write down the date, the price of the item, and the quantity. Then, you would write down the date and the amount of the next purchase. You can also include barcodes, receipts, and the return of the item. It’s really easy to keep track of all the expenses you make.

Purchasing decisions are often made quickly, based on limited information. We buy items based on what we think we can afford, often without even thinking about the cost implications. Purchasing decisions can have profound impacts on our lives, so you need to be able to make sound choices that will make your life better. If you aren’t careful, a purchase can have a very negative impact on your finances.

Home » Accounting Blog » Purchases Journal: Definition and Example

Feb 26, 2021
Accounting Blog by audit site

Definition

When you have expenses with a vendor, you may be recording them with a Purchases Journal. The Purchases Journal is a specialized type of bookkeeping log that keeps track of orders made by a business on credit or on account. It should be noted that cash purchases of merchandise are not tracked in the Purchases Journal.

Format

The format of the Purchases Journal will slightly vary from company to company based on how many details it wants to record, as well as what the company is doing and, accordingly, purchasing. As you can see from an example below, every company would include the basic information that would include:

  • Recording date
  • Vendor’s/Supplier’s account name
  • Invoice date and terms
  • Reference number
  • Purchase amount.

The bookkeeper might also decide to add a column with a short description of the purchase details. In addition, you will also see the amount of the invoice and specific accounts that were involved in the transaction. Usually, at the end of the month, the bookkeeper will total the amounts for each account and transfer the total to the Purchases account.

Examples

Now that you are familiar with the meaning and format of the Purchases Journal, let’s try using it to record a sample transaction.

On March 16th, Power Tools purchased inventory on account from Brown Manufacturing for $4,345. Purchase invoice number P155.

Purchases Journal Page 1

$4,345$4,345

Date Account Credited Invoice Number Payment Terms Ref. Accounts Payable – CR Inventory – DR Office Supplies – DR
Mar. 16 Brown Manufacturing P155

We enter the date of the transaction in the first column. The account credited is the name of the company, so it is going to be Brown Manufacturing. We would be crediting the Brown Manufacturing account because we (Power Tools) owe them money.

Since it was on account, we are promising to pay them back later. However, the payment terms are not specified in our example, so we are going to leave this section blank, as well as the reference number, which we are going to get after we post all transactions into the ledger. The two accounts involved in this transaction will get respective debit and credit entries.

Let’s review another example.

On March 28th, Power Tools purchased office supplies on account from Eco Supplies for $750. Purchase invoice number P158.

Purchases Journal Page 1

$4,345$4,345

$750

$750

Date Account Credited Invoice Number Payment Terms Ref. Accounts Payable – CR Inventory – DR Office Supplies – DR
Mar. 16 Brown Manufacturing P155
Mar. 28 Eco Supplies P 158

Note that we are adding this next transaction to the previous one since the Purchases Journal lists all the credit purchases for the period in chronological order. As with the previous example, we will enter the date and the name of the account – Eco Supplies. The invoice number is also recorded.

Once again, we will credit the Accounts Payable account. This account will be credited with every transaction we record in this journal. The other account where we will record a balancing debit entry will be the Office Supplies account.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What is a purchases journal explain briefly its format?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” A purchases journal is a record of all the items that are purchased. It is usually kept in a ledger format and includes the date, item, cost, and vendor.”}},{“@type”:”Question”,”name”:”How do you write a purchase journal?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” A purchase journal is a record of all the purchases you make. It can be used to track your spending habits and identify patterns in your spending.”}},{“@type”:”Question”,”name”:”What is in a purchase journal?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” A purchase journal is a record of all the purchases made by an individual. It can be used to track spending, identify patterns, and help with budgeting.”}}]}

Frequently Asked Questions

What is a purchases journal explain briefly its format?

A purchases journal is a record of all the items that are purchased. It is usually kept in a ledger format and includes the date, item, cost, and vendor.

How do you write a purchase journal?

A purchase journal is a record of all the purchases you make. It can be used to track your spending habits and identify patterns in your spending.

What is in a purchase journal?

A purchase journal is a record of all the purchases made by an individual. It can be used to track spending, identify patterns, and help with budgeting.

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