Purchase book is also known as Purchase Journal or Bought Book or Purchase Day Book or Invoice Book. It is used for recording all credit purchases of goods, meant for resale. Cash purchases are not recorded in this book. Cash purchases are entered in the cash book. Moreover, credit purchase of assets for the business are also not entered in this book. For instance, purchase of a motorbike on credit by a cloth-seller is not recorded in the purchase book whereas the same credit purchase by a motorbike dealer must be recorded in his purchase book.
Features of Purchase Book:
- Only credit purchase of goods are recorded.
- Those goods purchased on credit must be for re-sale.
- Cash purchases are not recorded.
- Asset purchases are also not recorded.
- To know the total credit purchase of goods.
- To know goods purchased from various supplier and the amount due to them.
- To make easier for the preparation of trading account.
- To save time and money for recording it.