Unit 11 - Purchases Ledgers

A purchase ledger is an accounting tool that is used by businesses to keep track of the purchases made on credit.

The primary objective of this tool is to maintain accurate records and have a clear idea of how much money is owed at any point in time. In the past, handwritten records were maintained, but nowadays, most businesses use electronic purchases ledgers to keep up their records. Thus, it is an essential tool for the accurate maintenance of records.

NOTE: Purchases refers to new stock or goods bought for resale or any other non-product related expenses. Credit payments for office supplies, telephone, rent, etc would be an Account Payable account. Small purchases, such as stationery, milk, travel and other minor expenses, are recorded in the Petty Cash Book (this topic would be explored in the upcoming unit)

Procedure for posting to the Purchases Ledger when a credit sale is made.

1. XYZ Ltd buys goods on credit.

2. The Supplier issues a Purchases invoice and sends it to XYZ Ltd.

3. The credit purchase is recorded in the Purchases Journal.

4. The details from the Purchases Journal is posted to the Purchases Ledger.

5. Total Purchases for the period is noted in the General Ledger.

6. The Accounts Payable Clerk ensures that the invoice is paid on time (usually within 30 days).

7. When XYZ Ltd finally pays, the transaction is recorded on PAYMENTS side of the Cashbook.

8. A copy of the Purchases invoice is filed in XYZ Ltd’s records, along with any other documents submitted to the Supplier.

Procedure for processing a refund from a Supplier.

1. XTZ Ltd returns some goods to a Supplier


XYZ Ltd discovers that the company was overcharged for goods.

2. A credit note is received from the Supplier.

3. The credit note is recorded in the Purchases Return Journal.

4. Details of the transaction is posted in the Purchases Ledger.

5. Total Purchases Return for the period is posted in the General Ledger.

6. A copy of the credit note is filed in XYZ Ltd’s records.


When payment is made via cheques, a cheque payment voucher is issued by the company making the purchases. This could be done for immediate or credit payments. It serves as proof that a monetary payment was made via a cheque.

Example of a Cheque Payment Voucher.

Question Example –

August 1st 2010 Smith purchased goods in the sum of $3000.00

August 15th 2010 Smith returned goods in the sum of $500.00


For the month of May, Dexter’s Tyre Store made the following transactions:

1st - Purchased 5 tyres from P Brown Enterprises @ $200 for one.

9th – Purchased 12 tyres from Magna Force Ltd @ $500 per tyre.

18th – Purchased 2 pumps from J K & Co for $400 in all

24th - Returned a pump to J K & Co.

31st - Issued cheques for the purchases.

Using the above scenarios, complete the:

a) Purchases Ledger

b) Cheque payment Vouchers

The material to complete the voucher assignment is available below. Students have the option of editing or printing the template.

If you are submitting a printable version, please ensure that the assignment is clear and not blurry.

Email your answers to actira.tt@gmail.com

If you are having difficulties, you can leave a message on Student Support tab on this page

or send us an email at actira.tt@gmail.com