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Differentiate between purchase book and purchase account
The major differences between a purchase book and a purchase account are as follows −
Purchase book
- Purchase book is the book, which records all the credit transactions related to the goods purchased.
- Primary book of accounts.
- The purpose of a purchase book is to maintain all the credit transactions related to the goods purchased.
- Records only transactions related to credit business.
- Purchase book balance is not transferred to business financial statements.
- No separate credit column.
- Not dependent on other books.
- The format of purchase book is as follows −
Date | Particulars | Invoice number | Ledger folio | Details | Amount |
---|---|---|---|---|---|
Purchase account
- Purchase account is the ledger account that records all the credit and cash transactions related to business.
- Secondary book of accounts.
- The purpose of a purchase account is to maintain the record of total stock (goods purchased) in a financial year.
- It records both credit and cash transactions related to business.
- Purchase account balance is transferred to the trading account in the financial statement.
- It has credit columns and debit columns.
- Dependent on journal day books.
- The format of a purchase account is as follows −
Date | Particulars | Journal folio | Amount | Date | Particulars | Journal folio | Amount |
---|---|---|---|---|---|---|---|
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