Quick Reference Guide - Purchase of Trading Goods through Cash Payment

Now let's come to discuss about the Journal Entry, Ledger Posting and related Reports/Statements in Final Accounts when Trading Goods are purchased through payment of Cash.

Affected Ledger Accounts :

• Purchases A/c - Debit
  

• Cash A/c - Credit

Journal Entry :

Ledger Posting :

Cash A/c - Credit Column

Purchases A/c - Debit Column

 Trial Balance :

• Cash A/c - Debit column of Trial Balance.

  Debit column of Trial Balance(Cash A/c) will be decreased by the transaction amount.
  

• Purchases A/c - Debit column of Trial Balance.

  Debit column of Trial Balance(Purchases A/c) will be increased by the transaction amount.

Trading and Profit & Loss Account :

• Purchases A/c - Debit side of Trading Account.

  Debit side of Trading Account(Purchases A/c) will be increased by the transaction amount.

Balance Sheet :

Cash A/c - under Current Assets in Assets side of Balance Sheet. 

Cash A/c under Current Assets will be decreased by the transaction amount.