CSEET · Fundamentals of Accounting · Accounting Process
Which of the following transactions is recorded in the Purchases Book of a trading firm?
The Purchases Book records only credit purchases of goods that the business deals in for resale. Credit purchase of furniture is an asset and is entered in the Journal Proper, cash purchases go to the Cash Book, and returns go to the Purchases Return Book.
- ACredit purchase of goods meant for resaleCorrect
- BCredit purchase of office furniture
- CCash purchase of goods for resale
- DReturn of goods to a supplier
Explanation
The Purchases Book records only credit purchases of goods dealt in by the business for resale. Furniture bought on credit is an asset and goes to the Journal Proper. Cash purchases go to the Cash Book, and returns go to the Purchases Return Book.
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