In accounting, purchases mean the buying of goods or assets for sale or production or other short term and long term goals. There are two main types of purchases. One is purchases of fixed assets and second is purchases of regular stock. As per the nature of business, these two types of purchases apply different way. For example, one company purchases shares for long term investment but second company purchases shares as its product because it has bought shares for selling quickly.

All purchases are done through purchase department. Purchase manager passes the order of purchase when company requires goods for production. Purchase department is also manage all things relating  to the receipt of goods.

Due to it is the part of major investment of business. Purchase department tries to get goods at cheap rates, so that company can save money on purchasing.

Accounting Treatment of Purchases of Stock of Company

 It will increase the value of inventory when calculates it . For recording this, we open purchase book and add all purchases in it which we bought on specific date. This book is the part of subsidiary book. Many computer accounting software use purchase voucher for passing the voucher entry of buying any goods for business.

See also


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Education of Accounting : Purchases
Education of Accounting
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