Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Making entries in the Purchases Ledger

  • In this example we will make entries into the Purchases Ledger, Cash Book and General Ledger
  • We will be skipping the books of original entry
  • Although this is not how things are done in practice
  • Examination/Exercise question might ask you to make double entries in the Purchases Ledger without asking you to use the Purchases Day Book/Purchases Journal
  • You should note that in these instances it will do you no good to create a Sales Day Book as no marks will be awarded for its preparation

A Hamadziripi has the following purchases for May 20X7:
1 Started the month with $4000 cash and $3000 balance in the bank from the previous month
1 Sold to M Mashayamombe: brass goods $24, bronze items $36. Less 25% trade discount
9 Bought from C Chauke: tin goods $400. Less 10% trade discount
16 Bought from A Chauke: copper  $320. Less 10% trade discount
24 Received full payment from M Mashayamombe in cash
31 Bought from M Negona: brass figures $100 cash
31 Paid C Chauke in full using a cheque and received 5% discount


Show Cash Book, General Ledger and Purchases Ledger entries for A Hamadziripi’s business


Purchases(Creditor's) Ledger
DrC Chauke AccountCr
31 MayBank3429 MayPurchases360
31 MayDiscount18
A Chauke Account
16 MayPurchases288
Cash Book
1 MayBalance b/d4000300031 MayPurchases100
25 MayM Mashayamombe3531 MayC Chauke18342
General Ledger
Sales Account
1 MayM Mashayamombe35
Discount Received Account
Purchases Account
9 MayC Chauke360
16 MayA Chauke288
31 MayCash100
  • This example is full of sneaky tricks
  • Trade discount is not recorded in the books as part of double entry only cash discount is recorded
  • The cash discount percentage is applied after trade discount has been applied
  • Sales are not recorded in the Purchases Ledger but since you have been asked to show General Ledger entries the Sales Account appears on the list of accounts
  • Cash purchases are not recorded in the Purchases Ledger so there are no entries for M Negona in the Purchases Ledger
  • A Chauke and C Chauke are two different people/entities and thus have different accounts in the Purchases Ledger
  • An alternative way of showing the Purchases Account is by showing the monthly credit sales total only.
General Ledger
Purchases Account
31 MayCash100
31 MayTotal credit purchases for the month648
  • In these case credit sales are recorded in the Purchases Day Book (which you don’t have to prepare), only Cash Purchases are recorded in the Purchases account  in the interim. The total of credit purchases for the month is then transferred from the Purchases Day Book.
  • It is important to note that the decision as to when the total is transferred to the Purchases Account is up to the business in question, it could be monthly, weekly, daily etc but it has to be consistently stuck to.

To access more topics go to the Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes.