Purchases Transactions In Accounting

There are two types of Purchases Transactions. Cash Purchases and Credit Purchases Transactions.

Cash Purchases Transactions

When goods purchased from supplier for Cash, then it is called Cash Purchases Transaction. For Example, Mr. A, as a buyer, purchases goods worth Rs. 2000 from Mr. B for Cash, then this is a Cash Purchases Transaction which is recorded only in the Cash Book.

Credit Purchases Transactions

Credit Purchases Transactions show the exchange of goods on credit between buyers and sellers. These Transactions are recorded only in Purchases Day Book or Journal. For Example, if Mr. A Purchased goods worth Rs. 3000 from his supplier, Mr. B, then it is a credit purchases transaction for the buyer who bought goods on credit while it is a Credit Sales Transaction for seller (Here Mr. B) as he sold goods to buyer (Here Mr. A).