What is Purchase? – Explanation with Examples



Purchase means getting the ownership of any goods or assets, by paying the predetermined price of them. It may be in cash or credit. In credit means, when business buys goods or assets without paying the predetermined price of them, This due amount will be paid in future.


In accounting, Purchase Ledger account is maintained only for goods. When the asset is purchased then it will be debited to the assets account. 

Examples of Transactions of Purchases: –

  1. Buy goods from M/s ABC Ltd. worth Rs 10,000.
  2. Buy goods worth Rs 50,000 from CD Pvt. ltd for cash.
  3. Bought goods for Rs 10,000.
  4. Bought Plant worth Rs 15,000.
  5. Stationery worth Rs 1,500, Bought from Ram & sons. 

Explanation of Examples: –

In the first three numbers of examples are is treated as purchase in the accounting and it will be entered in the purchase account. 

But the Fourth number of example is related to the purchase of the asset. So, this will not be entered in the purchase account. It will be debited to the asset account i.e. Plant and Machine a/c. 

and in last, The fifth transaction is related to the expense account. So, it will also not be entered into the purchase account. It will be debited to the Expense account i.e. Stationery a/c.


You can also read the following topics: –

Thanks Please share with your friends  

Comment if you have any question

Check out Financial Accounting Books @



error: Content is protected !!