Answer to Question #191569 in Accounting for Marinela Vidigal

Question

Trading inventory purchased $875.00,how do you record in a creditor journal?

Answer 1

Solution:

The creditor journal is used to record credit purchases only.

To record trading inventory purchased, we will do the following:

Dr. Trading inventory account                $875

Cr. Creditors control account                                         $875

 

When posting from the Creditor's Journal, you write “Creditors Control” as the contra account name. All transactions in the Creditor's Journal are credit transactions.

Creditors Control is a liability account, therefore, each time you purchase on credit we credit the Creditors Control account and debit what it was that was purchased.