Form and Method of Using the Purchase Journal.—The simplest form of purchase journal is the same as that of the standard journal. It provides space for date, classification, explanation, ledger index, and two money columns. In the purchase journal the money columns do not have “debit” and “credit” significance, but the first may be used for the detailed extensions and the other column for the total of each purchase. Assume, for the sake of illustration, that the following purchases have been made:
| January 10, 19—, | from S. C. Bontell, terms 2/10, n/30: | |
| 5 tons hay | @ | $12.00 |
| 100 bu. corn | @ | .90 |
| 1,000 bu. wheat | @ | 1.10 |
| 30 tons coal | @ | 4.50 |
| January 18, 19—, | from P. V. Stewart, terms 2/10, n/30: | |
| 50 tons hay | @ | $12.00 |
| 130 tons coal | @ | 5.00 |
| January 22, 19—, | from I. S. Van Doren, terms n/30: | |
| 100 tons coal | @ | $ 4.50 |
| 600 bu. wheat | @ | 1.00 |
| January 28, 19—, | from S. M. Sax, terms 2/10, n/60: | |
| 510 bu. wheat | @ | $ 1.10 |
The purchase journal record, using the simple form of the standard journal, would be as follows:
Form 7. Purchase Journal
Usually, however, a form of purchase journal is used which is better adapted to its purpose. In this, instead of giving the detailed explanation, the file number of the original invoice is written as part of the explanatory matter, which usually comprises only this file reference and the terms of the purchase. This modern type of journal is illustrated below.
Form 8. Modern Type of Purchase Journal
Posting the Purchase Journal.—In posting the purchase journal, it is customary to post daily the credits to the various vendor accounts as they are entered from day-to-day in the journal. In this way the true status of the amounts due these creditors may be known at any time by reference to their ledger accounts. The offsetting debit to Purchases account is posted only at the end of the month when the purchase journal is summarized. In the meantime the ledger is out of equilibrium because only the credit side of all purchase transactions has been entered in the ledger. This equilibrium is restored, however, by the monthly posting of the debit to Purchases account which must always be made before the trial balance is taken.
An essential part of posting is the cross-indexing of the two records, the journal and the ledger. The cross-reference column in the ledger account must show the initial and page of the journal from which each item is posted. For example, “P. 10” in the ledger would refer to purchase journal, page 10. Likewise the ledger folio (L.F. or Folio) column in the journal must show the ledger page of the account to which the item has been posted. Thus, in the illustration, Stewart’s account is on page 125 of the ledger, where he is credited with $1,250. At the end of the month the purchase journal is footed and the summary entry, “Purchases, Dr.,” is made and posted to the debit of Purchases account on page 10 of the ledger. This one debit item in the ledger brings about the equilibrium with the individual credits posted to the various personal accounts payable. The purchase journal is then ruled off and thus made ready for new entries for the next month immediately below the rulings.