CA Foundation · Accounting · Accounting Process
Rohan Traders purchased office furniture on credit from Sharma Furnishings for Rs 45,000. In which book of original entry should this transaction first be recorded?
The transaction is recorded in the Journal Proper. Furniture is a fixed asset, not goods for resale, so a credit purchase of it cannot go into the Purchases Book, which is reserved for credit purchases of trading goods only.
- APurchases Book
- BJournal ProperCorrect
- CCash Book
- DSales Book
Explanation
The Purchases Book records only credit purchases of goods meant for resale. Furniture is a fixed asset bought on credit, so it is not a trading purchase and is recorded in the Journal Proper. Recording it in the Purchases Book would wrongly inflate purchases.
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