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 :

Purchase of Trading Goods through payment of Cash - Journal Entry
Ledger Posting :

Cash A/c - Credit Column

Purchase of Trading Goods through Cash Payment - Posting in Cash Ledger

Purchases A/c - Debit Column

Purchase of Trading Goods through Cash Payment - Posting in Purchases Ledger
 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.

Purchase of Trading Goods through Cash Payment - effect on Trial Balance
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.

Cash Purchase of Trading Goods - effect on Trading Account

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.

Purchase of Trading Goods through Payment of Cash - effect on Balance Sheet

 


Location: Cuttack, Odisha, India

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