Subsidiary Books II—Other Books
Purpose of Purchases Book
Purchases book (also known as Invoice book/Bought book) is used for the purposes of recording of merchandise (i.e., the goods in which the enterprise deals in) on credit. It records neither the cash purchases of the merchandise nor the purchase of any asset other than the merchandise.
Source Document of Recording
The entries in the purchases book are made on the basis of invoices received from the suppliers with the amounts net of trade discount/quantity discount. Trade discount is a reduction granted by a supplier from the list price of goods or services on business considerations (such as quantity bought, trade practice etc.) other than for prompt payment.