[leelingd]

Hi
I am a bit confused on this transaction, which is purchased 29 plasma TV with cash for $1642 each, cheque no. 403.

Should I record this transaction in cash payment or purchase journal?
If its in cash payment? Do I need to add with gst? Thank you

[morgaine300]

There are no accounting rules for what has to be on special journals. A company can formulate them any way they like, because it's just internal work for their own records.

However, in general, a purchases journal would usually be for purchases on account, and this isn't on account. I'm assuming you have a cash payments journal?

As for the tax... um, in the U.S. anything purchased for resale doesn't have tax, but I couldn't say about some place else. However, unless you're given instructions that say to add tax to things, I would assume the $1642 is the total cost to be used, which would already include anything that needs included.

[rehmanvohra]

Hi
i am a bit confused on this transaction, which is purchased 29 plasma tv with cash for $1642 each, cheque no. 403.

Should i record this transaction in cash payment or purchase journal?
If its in cash payment? Do i need to add with gst? Thank you

There are two parts to your question:
1. Recording cash purchase
2. Recording GST

1. Since the purchase is on cash. You would use your Cash Book for recording cash purchases. Purchase journal is used for credit purchases

2. As regards GST. If your firm is registered with the Sales Tax authorities, then you can claim the sales tax from the sales tax collected on sales. You then analyze the purchase memo to find the value of goods and the sales tax. The entry would be:

Debit Purchases
Debit Sales Tax
Credit Cash

If your firm is not registered then the purchases account would be debited with the full value with a credit to cash