Similarities & Differences Between Income And Purchases
T he price of goods / products sold or services re ndered to customers is called Revenues or Incomes w hile goods purchased are called Purchases . There are two types of reve nues i.e., Direct Revenue and Indirect Revenue. Purc hases i ncludes Cash Purchases a nd Credit Purchases . Reve nues are recorded in Income Statement or Trading & Profit And Loss Account w hile Purchases are recorded i n Income Statement or Trading Account. Similarities Betwee n Revenues And Purc hases Both are Temporary Accou nts w hich are closed at the e nd of t he accou nting period. Direct Reve nue i.e., Sales and Purc hases are used to calculate Cost of Sales or Cost of Goods Sold for the accou nting period