Dbs1034 biz trx week 8 purchases day book and ledger

Purchases day book, Purchases ledger

1. Purchase day book and Purchase day book and
Purchase ledgerPurchase ledger
Purchase day book and Purchase day book and
Purchase ledgerPurchase ledger
DBS1024 BUSINESS TRANSACTIONDBS1024 BUSINESS TRANSACTION
by
Stephen Ong
Visiting Fellow, Birmingham City
University Business School
Visiting Professor, Shenzhen
University

2. Today’s Overview Today’s Overview

3. 1 - 3
Learning objectivesLearning objectives
Make the appropriate entries relating Make the appropriate entries relating
to credit purchases in a purchases to credit purchases in a purchases
day bookday book
Make the correct postings from the Make the correct postings from the
purchases day book to the purchases purchases day book to the purchases
ledger and general ledgerledger and general ledger
Explain the differences between the Explain the differences between the
processes of recording credit sales processes of recording credit sales
and credit purchases in the booksand credit purchases in the books

4. 1 - 4
Purchase invoicesPurchase invoices
Purchase invoices are sent to the Purchase invoices are sent to the
buyers of any goods that have been buyers of any goods that have been
bought on credit.bought on credit.
Any sales invoice issued by a business Any sales invoice issued by a business
is a purchase invoice when received by is a purchase invoice when received by
the buying business.the buying business.
The buyer enters the purchase invoice The buyer enters the purchase invoice
into a into a purchase day book purchase day book before before
recording the details using double recording the details using double
entry bookkeeping.entry bookkeeping.

5. DocumentationDocumentation

6. 1 - 6
Purchase day bookPurchase day book

7. 1 - 7
Posting credit purchasesPosting credit purchases
From the purchases day book:From the purchases day book:
The credit purchases are The credit purchases are
posted individually to the posted individually to the credit credit
of each supplier’s account in of each supplier’s account in
the purchases ledger.the purchases ledger.
The total of the credit The total of the credit
purchases is posted to the purchases is posted to the
debit of the purchases account debit of the purchases account
in the general ledger.in the general ledger.

9. Purchase invoices – sequence of events

10. 1 - 10
44
ActivityActivity

11. 1 - 11
ActivityActivity
Post the purchases day book to the Post the purchases day book to the
supplier accounts in the purchases supplier accounts in the purchases
ledger and the purchases account in the ledger and the purchases account in the
general ledger.general ledger.

12. 1 - 12
Activity (Continued)Activity (Continued)

13. 1 - 13
Learning outcomesLearning outcomes
You should have now learnt:You should have now learnt:
1.1.That ‘purchases day book’ and That ‘purchases day book’ and
‘‘purchases journalpurchases journal’ are different names ’ are different names
for the same bookfor the same book
2.2.That That cash purchases are not cash purchases are not entered in entered in
the purchases day bookthe purchases day book
3.3.That the purchases day book is a list of That the purchases day book is a list of
all all credit purchasescredit purchases

14. 1 - 14
Learning outcomes (Continued)Learning outcomes (Continued)
4.4.That the purchases day book is That the purchases day book is
used to post the items to the used to post the items to the
personal accounts in the personal accounts in the
purchases ledgerpurchases ledger
5.5.That the total of credit purchases That the total of credit purchases
for the period is posted from the for the period is posted from the
purchases day book to the purchases day book to the debit of debit of
the purchases account in the the purchases account in the
general ledgergeneral ledger

15. 1 - 15
Learning outcomes (Continued)Learning outcomes (Continued)
6.6.How to make the appropriate How to make the appropriate
entries relating to credit purchases entries relating to credit purchases
in a purchases day book and make in a purchases day book and make
the correct postings from it to the the correct postings from it to the
purchases ledger and the general purchases ledger and the general
ledgerledger
7.7.That the process of making entries That the process of making entries
in the books of the purchaser is in the books of the purchaser is
very similar to that of making those very similar to that of making those
in the books of the sellerin the books of the seller

16. Resources : Core ReadingResources : Core Reading
Wood, Frank and Robinson, Sheila Wood, Frank and Robinson, Sheila
(2009) (2009) Bookkeeping and Accounts Bookkeeping and Accounts ,7,7
thth

Edition, Pearson/ FT Prentice HallEdition, Pearson/ FT Prentice Hall
Wood, Frank and Sangster, Alan
(2012) Business Accounting ,12
th

Edition, Pearson/ FT Prentice Hall
Fortes, Hilary (2011) Accounting
Simplified , Pearson/ FT Prentice Hall

17. QUESTIONS?QUESTIONS?