Differences Between Assets And Purchases

Assets (Current Assets, Non Current Assets / Fixed Assets, Contingent Assets) are the useful resources owned and controlled by the business from which it expects to get favorable return on future while Goods purchased are Called Purchases which are either Cash Purchases or Credit Purchases / Purchases on Account.

Assets are Permanent Accounts which are finally transferred to Balance Sheet while Purchases are Temporary Accounts which are finally recorded in Income Statement or Trading Account as a direct expense.

If goods purchased for use in the business, then we consider such purchase as Purchase of Assets but goods purchase for resale purposes are considered as Purchases in Accounting.