Accounts are divided into two types namely primary accounts and secondary accounts. In books of primary entry, there are special books called subsidiary books.
Purchase day book is a type of subsidiary book. Its main purpose is to record all business credit purchases (meant for resale). This book does not record purchase transactions (by cash) and purchases which are not meant for resale purchases.
Cash purchase transactions are recorded in the cash book. Balance is debited to purchase account and supplier of goods is credited to individual amounts. This book shows the total amount of credit purchases for a period.
Purchase book is also called a purchase journal/purchase book/invoice book etc. It is the book of the original entry.
The format of a purchase book is as follows −
|Date||Name of supplier||Ledger folio||Inward invoice number||Amount|
Details recorded in purchase book as per format are as follows −
The advantages of purchase book are as follows −