A purchase ledger can be defined as a sub ledger in business accounting that is used to record all the purchases made by the business in that accounting period. The entire amount that a business is spending and transacting with its supplier is aggregated at one place that is called a purchase ledger. The purchase ledger also shows outstanding and paid purchases as well. Almost all the transactions that are entered into purchase ledger are tagged as accounts payable followed by the date on which they are going to be paid and will be eliminated from the accounts payable.
The record of a purchase ledger contains a large amount of information in it including purchase date, code or the name of the supplier, invoice number, purchase number, item identification code, amount paid for purchase, tax paid for purchase and payment flags indicating payment is made or the purchase is made on a credit. The most important piece of information or document that is recorded in the purchase ledger is the supplier invoice of the purchase. Credit memos issued by the supplier in return of damaged goods or returned goods are also recorded in purchase ledger.
The information in the purchase ledger is aggregated periodically and is entered in the control account of the general ledger. The balance of the purchase ledger and that of the control account of the general ledger must be same immediately after entering the transactions. All the information of the accounts of a purchase ledger are posted to the general ledger before closing the books for that accounting period
Other Related Accounting Articles: