The following General Ledger entry is based on the transactions that appear in the Purchases journal … Narration (Being purchase made) Note: Total Input for the month of October is Rs.18000/- out of which invoices uploaded by the suppliers with ITC only of Rs.10000 – Debit: GST Input A/c 18,000. Credit: Creditors A/c 1,18,000. An accounting journal entry is the written record of a business transaction in a double entry accounting system. It is a book of original entry - a special journal. It is a book of final entry - a ledger account. This means purchases we have not paid for but will pay for in the future. Debit or Credit ? This is what the system of double-entry bookkeeping is based on. A Journal Entry is simply a summary of the debits and credits of the transaction entry to the Journal. To illustrate the perpetual inventory method journal entries, assume that Hanlon Food Store made two purchases of merchandise from Smith Company. There was one transaction identified for the purchase journal for Fooz Ball Town: July 12 Purchased $10,000 of merchandise inventory, terms 2/15, n 45, FOB Destination from Gus Grass. Journal entries are important because they allow us to sort our transactions into manageable data. 2. Choose the Post button to post the purchase credit memo. Journal Entry for an Inventory Purchase This is the initial inventory purchase, which is routed through the accounts payable system. Purchase Journal Entry Questions – Credit Purchase Journal Entry. Basic Journal Entries Example 2. This entry is made when a refund is received from supplier for merchandise returned to him. Example: On April 01, 2016, Y Merchants purchases merchandise for $2,500 cash from Z Traders. Type field and the Applies-to Doc. In a dynamic environment, credit sales are promoted to keep up with the cutting edge competition. 2. A company has credit card sales of $50,000, and the bank charges a 2% credit card fee. A purchase journal is a specialised accounting journal and it is also a prime entry book/daybook/main entry book which is used in an accounting system to keep track of the orders of items placed using accounts payable.. Accounting and Journal entry for credit sales include 2 accounts, debtor and sales. The bank fee for the credit cards is 3.5%. The sales journal (also known as sales book and sales day book) is a special journal that is used to record all credit sales. When a customer returns something they paid for with credit, your Accounts Receivable account decreases. Reverse the original journal entry by crediting your Accounts Receivable account. Inventory Purchases. In second entry we debit cash account and credit accounts receivable account. A Purchases journal keeps track of all purchases of goods to be sold. You will credit your Purchases account to record the amount spent on the materials. 1. Let’s assume that your business purchases a new van on January 1. Consider the following diagram . Usually, a bookkeeper will be entering this information in the general ledger's inventory journals for all of the products that you manufacture (if you don't have a bookkeeper, generally the owner makes the entries). Purchase Returns . When adding a COGS journal entry, you will debit your COGS Expense account and credit your Purchases and Inventory accounts. On May 4, Hanlon purchased $30,000 of merchandise with credit terms of 2/10, n30 and shipping terms FOB Destination. Meaning of Purchase. A journal is a breakdown of all financial transactions and accounts that affect the transaction. So, the document type could be a payment, a credit memo, etc. If the purchases in respect of the goods returned were made for cash, then a receivable must be recognized to acknowledge the asset resulting from the expected reimbursement to be received from the supplier in respect of the returned goods. 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