Purchase Day Book in Accounting

We have seen in accounting there are two types of accounts – accounts of primary entry and accounts of secondary entry. There are some specialized books of primary entry known as subsidiary books. One of the important subsidiary books is the purchase journal or the purchase day book. Let us take a detailed look.

Purchase day book is also known as purchase journal, purchase book, invoice book, bought book etc. is a type of subsidiary book. It is also a book of original entry.

The purpose of the purchase day book is to record all the credit purchases of the business that are meant for resale.

This means that it does not record any cash purchase transactions. Such transactions will be recorded in the cash book.

Also, any purchases not meant for the purpose of resale are not recorded in the purchase book. For example, a machine bought on credit will not be recorded in the purchase book, but the journal.

After recording all the credit purchase transactions, the book is totaled at the end of the month or week. This aggregate amount shows the total amount of credit purchases for the period.

This amount is debited to the purchase account. And the suppliers of the goods are credited with their individual amounts. i.e. money owed to them.

Browse more Topics under Books Of Prime Entry

Learn more about Sales Day Book here in detail.

Format of Purchase Day Book

Purchase Day Book

The format of the purchase day book is slightly different than the normal journal. There are five columns in total in a usual purchase book.

The first column as you can see is the date. Then it is the particulars column which here will only focus on the name of the supplier. Here you can add the other details such as quantity supplied, the rate of the goods etc.

The third column is the ledger folio, and the fourth is the invoice number. Both of these details are for reference purposes.

In manual accounting, cross-referencing is very important. The last column is the amount column, where we record the total amount due to the supplier for that transaction.

Advantages of Purchase Day Book

All entries of purchases of goods on credit are recorded in one place. It is easy to reference and browse these entries.
Important information about these transactions (like the number of goods or the rate of purchase etc.) are written in the journal
There is no need for explanatory narrations or account titles either
It enables the division of labor among the business’s employees

Solved Question on Purchase Day Book

Q: XYZ Co. runs an electronics store> The following were there purchases for the month of June 2018. Make a purchase day book for the same.

Bought 20 computers from ABC Co. at 20,000/- per computer and a 10% trade discount
Bought 100 phones from LMN Co. at 1000/- on credit
350 televisions from DEF Co. at 24500/- each and a 5% cash discount
Purchased 200 radios from JKL Co. at 500/- each on credit

Ans:

Purchase Day Book

Date	Name of Supplier	Invoice	LF	Amount
4/6/18	ABC Co. 20,000 × 20 @ 10% discount			3,60,000/-
8/6/18	LMN Co. 100 × 1000			1,00,000/-
15/6/18	JKL Co. 200 × 500			1,00,000
	Total			5,60,000/-