Question

Purchases book is used to record all ______________.

• A. purchases of goods
• B. credit purchases
• C. credit purchases of goods
• D. credit purchases of assets other than goods.

Answer 1

Answer: (C)

credit purchases of goods

All goods purchased on credit is recorded under Purchase Book. Only credit purchases are recorded in Purchase book and not cash purchases. Goods means those things that are purchased or produced for resale in business. Any purchase of asset is not recorded in Purchase book. Whenever goods are purchased on credit purchase account is debited (as per the rule, "Debit what comes in") i.e. goods comes in, hence purchase account is debited.