Purchases Journal (Purchase Day Book)

The purchases journal, sometimes referred to as the purchase day book, is a special journal used to record credit purchases. The purchases journal is simply a chronological list of all the purchase invoices and is used to save time, avoid cluttering the general ledger with too much detail, and to allow for segregation of duties.

It should be noted that the purchase journal only includes credit purchases from suppliers and does not for example, include cash purchases or purchase returns. Cash purchases are included in another special journal called the cash disbursements journal, and purchase returns are included in the purchase returns journal or if not used, the general journal.

The information recorded in the purchases journal is used to make postings to the accounts payable ledger and to relevant accounts in the general ledger. The purchase journal is a book of prime entry and the entries in the journal are not part of the double entry posting.

purchases journal or purchases day book

Information Listed in the Purchases Journal

The information in the purchases journal is taken from the supplier invoices and typically includes the following:

  • Transaction date
  • Supplier
  • Accounts payable ledger reference
  • Invoice number
  • Invoice Amount
  • Purchase type columns (inventory, supplies, equipment etc.)
  • Other

The purchase type columns will depend on the nature of business. Some businesses simply have one column and record only inventory items in the purchases journal, others use it to record all purchases made on credit and will for example, include columns for fees, office supplies, equipment etc. The multi-column purchase journal should always have an ‘other’ column to record credit purchases which do not fit into any of the main categories.

A typical single column purchase journal is shown below.

Purchases Journal Columns
Date Supplier LF Inv. Amount
05/01 ABC PL 31 12 200

The columns in the diagram are the transaction date (Date), supplier name (Supplier), accounts payable ledger folio reference (LF), invoice reference number (Inv), and the monetary amount of the invoice (Amount) highlighted in gray.

Purchases Journal Example

The use of the purchases journal is a three step process.

  1. Information is recorded in the purchases journal from supplier invoices
  2. The purchase journal line items are used to update the accounts payable ledger for each supplier
  3. The purchase journal totals are used to update the general ledger

It should be noted that, if the business maintains an accounts payable ledger control account in the general ledger, then only step 3 above is part of the double entry bookkeeping posting.

1. Purchases Journal is Updated from Invoices

Each purchase invoice is recorded as a line item in the purchases journal as shown in the example below. In this example, all the items are assumed to be inventory purchases and some information has been omitted to simplify the example. In practice, each line item would include the information listed above.

Purchases journal
Date Supplier Inv. Amount
05/01 ABC Inv 12 200
05/04 EFG Inv 45 300
05/31 XYZ Inv 67 250
Total 750

Each line represents the information from a purchase invoice.

2. Purchases Journal Used to Update the Accounts Payable Ledger

On a regular (usually daily) basis, the line items in the purchases journal are used to update each supplier account in the accounts payable ledger. In the above example, 200 is posted to the ledger account of supplier ABC, 300 to supplier EFG, and 250 to supplier XYZ. When posting to the accounts payable ledger, a reference to the relevant page of the purchase journal would be included.

As the business maintains control accounts in the general ledger, the accounts payable ledger itself is not part of the double entry bookkeeping, it is simply a record of the amounts owed to each supplier.

3. Purchases Journal Totals Used to Update the General Ledger

At the end of each accounting period (usually monthly), the purchases journal totals are used to update the general ledger accounts. As the business is using an accounts payable control account in the general ledger, the postings are part of the double entry bookkeeping system.

In the above example, the purchases journal total for the month is 750, and in this particular case represent inventory purchases made on credit terms from suppliers. The double entry bookkeeping entry would be as follows:

Purchases journal used to update the general ledger
Account Debit Credit
Purchases 750
Accounts payable 750
Total 750 750

In this case, the inventory purchases account is debited to record the amount purchased. Had the purchases journal recorded other items such as equipment purchases or office supplies, then the debit would have gone to the appropriate asset or expense account.

There credit entry is to the accounts payable control account in the general ledger, and represents the outstanding liability of the business to pay its suppliers.

Purchases Journal Proof of Postings

The are two checks which can be made at the end of an accounting period to prove that the information in the purchases journal has been correctly transferred to the ledgers, as follows:

  1. The total line item postings to the accounts payable ledger made in step 2 above, should equal the total posted to the accounts payable control account in the general ledger in step 3 above.
  2. The total of all the supplier account balances in the accounts payable ledger should be equal to the balance on the accounts payable control account in the general ledger.
Last modified October 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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