Question

Source document on the basis of which Purchase Book is prepared ____________.

• A. Outward invoice
• B. Inward invoice
• C. Sales invoice
• D. None of the above

Answer 1

Answer: (B)

Inward invoice

The source document, on the basis of which the transaction are recorded in the Purchase book, is called inward invoice, bill, or credit memo. It is received by a firm from the supplier of goods when the credit purchases are made. It contains the quality of the goods, rate, amount etc. and serial number that is recorded in the purchase book.