Journal Entry for Stock purchase

Journal Entry for Stock purchase

In this article we would discuss the journal entry for stock purchase. There are two method of accounting the stock purchased i.e. periodic inventory method and perpetual inventory method. Both of these methods have been briefly explained below;

Journal Entry for Stock Purchase in Periodic Method

In this method the inventory purchase is treated as expense at the time of purchases. Thus purchases account is debit and cash or creditor account is credited. The full amounts of purchase are charged to cost of sales.

Date	Particular	Ledger Folio	Dr.	Cr.
	Purchases		xxx
	Cash/Creditor			xxx

Journal Entry for Stock Purchase in Perpetual Method

In perpetual method stock purchases are treated as stock at the time of purchases. Thus purchases are debited as stock and cash or creditor account is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Stock		xxx
	Cash/Creditor			xxx