moonkhan209
Oct 2, 2011, 03:40 PM
Purchased 80 copies of Practice Set ofr Dummies with cash for $28 each, Check No. 905. I want to know that how can I record it in Purchase Jornal and in Cash Payment. Very confused, please help
paraclete
Oct 2, 2011, 08:28 PM
purchase journal is usually used for purchases made on credit the cash journal entry is debit purchases $28, credit cash $28.
your confusion is the classic confusion when dealing with the cash side of the equation
the purchase journal entry debits the purchase account and credits the creditor in this case; cash
A debit transaction occurs when you have received value, that is acquire an asset. A credit transaction where you have given value, that is reduced the value of an asset or acquired a liability, thus cash has given value to purchases which has received value.