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

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.

The company’s main activities, which occur regularly and consistently, are buying and selling transactions. As a result, accurate, precise, reasonable, and correct records are required. Now, in this article, we’ll go over this journal in detail, with examples and how it’s recorded in the financial statements.

Definition of Journal Purchases

In a nutshell, a purchases journal is a journal entry used 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, are recorded in the purchase of raw materials journal. In addition, vehicle purcha ses will be recorded in the journal of credit purchases and accompanied by 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 used to register the credit purchase of merchandise. Transactions of merchandise purchased on credit for sale are recorded in the purchase journal. The purchase journal does not include an asset purchased on the account.

However, many people believe that all credit transactions should be recorded 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 this journal is intended for recording merchandise purchased on credit, the purchase of assets and other things on credit should not be recorded in the purchase journal; instead, these should be recorded in the general journal.

The format of the purchase journal:

Single-column purchase journal:

Purchase Journals
Source : Google.com

A single-column purchase journal is only used 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 journal columns are used by the organizations concerned based on their requirements.

Trade journal

The value that is exempted from the catalogue price as per terms by the seller to the purchaser at the time of sale is referred to as a trade discount.

The trade discount is permitted to benefit the buyer of goods by earning a specific amount of profit by selling goods. For example, during price-fixing, the price of a commodity is set 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. Trade discounts are not recorded in the account books because they do not result in a financial charge for either the seller or the buyer.

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 dual aspects must be completed when posting to the ledger. It is not required to display 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 catalogue, weekly or monthly purchases should be debited from the miscellaneous account on the debit side.

Cash receipts journal

The cash receipts journal is a particular journal used for recording all types of cash receipts. In today’s world, a cash receipts journal is used every day in medium and large-sized business organizations. 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. Cash from sources other than cash sales and account receivables are recorded in the other accounts column. 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 organisation, 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 is expected to be easier to record after thoroughly discussing the subject matter. This is done to ensure that the financial statements presented are valid and accurate and can be used as a reference by 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
Looking forward to give the readers more new insights and useful informations everyday! For business inquiries: [email protected]


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