Journal Entry Distributions—Purchase Orders
Purchase order transactions are posted to the General Ledger in the following manner:
Purchase Orders Journal
|
Transaction |
Debits |
Credits |
|---|---|---|
|
Purchase of expense on account |
Purchase Expense |
Accounts Payable |
|
Purchase of stock or assembly items on account |
Inventory |
Accounts Payable |
|
Purchase of non-stock, labor, or service items on account |
Salary and Wages Expense (or miscellaneous item expense) |
Accounts Payable |
|
Credit memo |
Accounts Payable |
Inventory or Purchase Expense |
Note: For companies using the cash-basis accounting method, Accounts Payable is replaced with <Cash Basis> and is not recorded in the General Ledger. Instead, expense (or inventory) and cash are recorded when the purchase is paid.