What Are Purchases In Accounting
When goods are purchased on Cash Basis or Credit Basis / Accrual Basis with the purpose of reselling these later on, then we can say that purchases are made for the business. The word "Purchases" is specifically used for goods or Merchandise / Inventory purchased i n Accounting . Also the word "Purchased" is more relevant to the accounting world rather than "Purchasing". If goods are bought for only use in Business, then it is not called Purchased rather than a n Asset . For Example, if Mr. A purchased Chairs for selling purposes, then it is called purchases but if he used them in business for operating and not for sale purposed then this is Current Asset and categories as Furniture. Purchases is not limited to goods or merchandise, but it also includes office supplies and services as these are incurred or rendered for the purpose of selling or for the running of the business operations. But, norm ally, goods purchased are ca