Differences Between Assets And Purchases
Assets (Curre nt Assets, N on Curre nt Assets / Fixed Assets, Contingent Assets) are the useful resources ow ned an d co ntrolled b y the b usi ness from w hich it expects to get favora b le retur n on future w hile Goods purchased are Called Purchases which are either Cash Purchases or Credit Purchases / Purchases on Account . Assets are Permanent Accounts w hich are fi nally transferred to Balance Sheet while Purchases are Temporary Accounts w hich are fi nally recorded in Income Statement or Trading Account as a direct expense. If goods purc hased for use i n t he b usi ness, t he n we co nsider suc h purchase as Purchase of Assets b ut goods purchase for resale purposes are co nsidered as Purc hases i n Accounting.