There are several journals that are used for recording the financial transactions of a business. The purchases and sales journal are generally used to record a vast majority of transactions where cash is not involved. This article looks at these two journals and how they are used in daily business transactions along with examples of more common entries.

Before learning the basic premise of the purchases and sales journals, the reader should have a basic knowledge of debits and credits. In today’s computerized world, many companies use an automated system that automatically records transactions to these two journals without the use of a manual system. In order to get a better understanding of how these two journals work, we’ll look at these journals from a viewpoint of a manual type system.

Bookkeeping and the Purchases Journal

When purchases are made on open account, the transactions are normally posted to the purchases journal. When purchases are made for cash, the cash payments journal is used, not the purchase journal. Since this journal is only used for purchases on open account, the main general ledger (GL) account that’s almost always affected is the accounts payable account.

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