Explain about the recording purchases, Accounting Basics

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Explain about the RECORDING PURCHASES

Source document for recording a purchase of merchandise is purchase invoice.

o An instance of a transaction of purchasing merchandise on account:

Debit to PURCHASES

Credit to ACCOUNTS PAYABLE and the NAMED COMPANY

Purchased merchandise on account

o An example of a transaction of purchasing merchandise for cash:

Debit to PURCHASES

Credit to CASH

Purchased merchandise for cash

 


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