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Question

In purchase book, goods purchased on ______ are recorded.


A
Cash
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B
Credit
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C
Goods
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D
All of the above
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Solution

The correct option is B Credit
Purchase book records credit purchases of goods only. Whenever goods are purchased, Purchases account is debited. In all cases of purchases, goods come into the business (as per the rule i.e. "Debit what comes in"), so purchases account has to be debited. The document on the basis of which purchase book is prepared is known as "Credit memo".

Accountancy

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