Slide 15 1 Chapter 15 Purchases day book

Slide 15. 1 Chapter 15 Purchases day book and purchases ledger Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 2 Learning objectives After you have studied this chapter, you should be able to: Ø Make the appropriate entries relating to credit purchases in a purchases day book Ø Make the correct postings from the purchases day book to the purchases ledger and general ledger Ø Explain the differences between the processes of recording credit sales and credit purchases in the books Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 3 Purchase invoices Ø Purchase invoices are sent to the buyers of any goods that have been bought on credit. Ø Any sales invoice issued by a business is a purchase invoice when received by the buying business. Ø The buyer enters the purchase invoice into a purchase day book before recording the details using double entry bookkeeping. Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 4 Purchase day book Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 5 Posting credit purchases From the purchases day book: Ø The credit purchases are posted individually to the credit of each supplier’s account in the purchases ledger. Ø The total of the credit purchases is posted to the debit of the purchases account in the general ledger. Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 6 Activity Post the purchases day book to the supplier accounts in the purchases ledger and the purchases account in the general ledger. Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 7 Activity (Continued) Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 8 Learning outcomes You should have now learnt: 1. That ‘purchases day book’ and ‘purchases journal’ are different names for the same book 2. That cash purchases are not entered in the purchases day book 3. That the purchases day book is a list of all credit purchases Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 9 Learning outcomes (Continued) 4. That the purchases day book is used to post the items to the personal accounts in the purchases ledger 5. That the total of credit purchases for the period is posted from the purchases day book to the debit of the purchases account in the general ledger Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012

Slide 15. 10 Learning outcomes (Continued) 6. How to make the appropriate entries relating to credit purchases in a purchases day book and make the correct postings from it to the purchases ledger and the general ledger 7. That the process of making entries in the books of the purchaser is very similar to that of making those in the books of the seller Frank Wood and Alan Sangster , Frank Wood’s Business Accounting 1 , 12 th Edition, © Pearson Education Limited 2012