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Types & Examples of Purchase Journal That Are Important For You To Know!

Large organizations no longer manually create purchase and sales journals. Established companies today have switched to using accounting software. Essentially, the purchase journal is used by the company’s owners to record the activities associated with the purchase transaction. Aside from the purchase journal, there is also a sales journal that serves a similar purpose as the purchase journal.  This accounting software utilizes the concept of modularity where a similar set of activities is converted into specific modules. Download the HashMicro accounting software price scheme to know your costs in using this software.

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The company’s main activities, which occur regularly and consistently, are buying and selling transactions. The current purchasing process control can be monitored using accounting software that can manage cash flow and purchase submissions from each supplier. Therefore, it is necessary to have accurate, precise, reasonable, and correct records. Using accounting software can provide you with an accurate analysis report to help you enhance future sales. Now, let’s discuss the purchase journal in detail, complete with examples and how to record it in the financial statements in this article. As a result, it needs, accurate, precise, reasonable, and correct records. Now, in this article, we’ll go over this journal in detail, with examples and the way to record it in the financial statements.


Table of Content

  • Definition of Journal Purchases
  • Four Types & Examples of Purchases Journals
  • Conclusion
  • Definition of Journal Purchases

    In a nutshell, a purchases journal is a journal entry that has a function to keep track of purchases that have occurred. Purchase transactions are recorded in the purchases journal in the same way that sales transactions are recorded in the sales journal. This applies to purchases made on credit, in cash, or for the return of goods. This also applies to purchase discounts.

    Purchases of raw materials, for example, will be in the record of the purchase of raw materials journal. In addition, the record of vehicle purchases will be in the journal of credit purchases and the appropriate VAT amount.

    Also read: The Difference Between Purchase Order and Invoice

    Four Types & Examples of Purchases Journals

    There are four types of purchases journals that you should know about: cash purchases journals, credit purchases journals, discount purchases journals, and purchases returns and discounts journals. A cash purchases journal is the most common type of purchases journal. Here’s a full explanation:

    Purchase Journal

    Accounting uses seven different journal books to keep track of accounts and record similar transactions. A purchase journal is a particular journal which function to register the credit purchase of merchandise. Purchase journal will record the purchase transactions of merchandise on credit. The purchase journal does not include an asset purchased on the account.

    However, many people believe that the record of all credit transactions should be in the multi-column purchase journal. Pyle and Larson, for example, have shown credit purchases of assets and supplies, etc., in a separate column in a purchase journal – debiting assets or office supplies and crediting accounts payable. Because the intention of this journal is for recording the purchase of merchandise on credit, the record of the purchase of assets and other things on credit should in the purchase journal; instead, the general journal should record it.

    The format of the purchase journal:

    Single-column purchase journal:

    Purchase Journals
    Source: Google.com

    The usage of a single-column purchase journal is to record credit purchases of goods. In this regard, this journal format is the same in periodic and perpetual systems.

    However, in the case of the periodic system purchase account and the perpetual system merchandise inventory accounts are both debited, and account payable is credited:

    Multi-column purchase journal

    Purchase Journals
    Source: Google.com

    Some businesses keep a multi-column purchase journal to record credit purchases of goods, assets, and other items. The function of the journal columns for the organizations according to their requirements.

    Trade journal

    The trade discount is the exemption of value from the catalog price as per terms by the seller to the purchaser by the time of sale.

    Buyer can benefit using the trade discount of goods by earning a specific amount of profit by selling goods. For example, during price-fixing, setting the price of a commodity at $100, plus a 5% trade discount. When selling, the seller can grant a 5% trade discount, which means the buyer gets the benefit of selling the commodity at $95. The account book does not record the trade discounts because they do not result in a financial charge for either the seller or the buyer. 

    To speed up your invoicing process, help you get paid faster, and maintain cash flow, you can use e-invoicing software. The software can also perform follow-up payments automatically. 

    Also read: Get to Know the Types of Sales and Purchase Returns

    Posting in Ledger

    A double-entry system does not write the purchase journal; it is not written with the debit and credit accounts determined. As a result, its must complete dual aspects before posting it to the ledger. We can’t see the display of the journal entry submitted at the end of the purchase journal. These journals have been provided for ease of posting to the ledger. Opening a purchase account in the catalog, the weekly or monthly purchases should take the debit from the miscellaneous account on the debit side.

    Cash receipts journal

    The cash receipts journal is a particular journal that has a function to record all types of cash receipts. In today’s world, medium and large-sized business organizations use cash receipts journal everyday. The two primary sources of cash receipts are cash from cash sales and money from accounts receivable. There could be other sources of cash receipts. For example, taking out a bank loan, receiving interest, selling assets for cash, and so on.

    In general, the cash receipts journal has two debit columns for cash receipts and cash discounts and three credit columns for accounts receivable, sales, and other charges. Other account column record cash from sources other than cash sales and account receivables. Suppose the perpetual inventory system is used to record merchandise inventory.

    Periodic Inventory System: Under the periodic inventory system, the format of the cash receipt journal is as follows:

    Purchase Journals
    Source: Google.com

    Perpetual Inventory System: Under the perpetual inventory system, the format of the cash receipt journal is as follows:

    Purchase Journals
    Source: Google.com


    Purchasing goods and services is one of the essential activities in any organization, be it a service, trade, or manufacturing organization. Manufacturing companies will almost certainly purchase raw materials and auxiliary materials from suppliers to support their manufacturing operations. Service companies need suppliers to assist them in their business operations. On the other hand, trading companies need suppliers for their wares as well as assistance with their operations.

    This journal will be easier to record after thoroughly discussing the subject matter. This is important to ensure that it present a financial statements that is valid and accurate and has a usability as a reference for business people in preparing operational strategies for the next accounting period.

    However, if you don’t have much time to complete purchase journal entries, trusted HashMicro’s Accounting System will help you save your time. You will be able to generate hundreds of different types of financial reports, including purchase reports, by simply entering some of the required information. What are you waiting for? Try now!

Interest in getting savvy tips for improving your business efficiency?

Olivia Mariane Gunawan
Olivia Mariane Gunawan
Looking forward to give the readers more new insights and useful informations everyday! For business inquiries: [email protected]


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