 In this discussion, we will discuss the discussion question of describe transactions that would use a cash purchases journal. If we see a discussion question like this or an essay type question like this, we may want to approach this by first looking at the cash purchases journal and what it is. If we look at a cash purchases journal, we have to assume that we are going to be using some type of system that is using special journals in order to record transactions. So the first thing we want to note here is that the purchases journal will typically be used when using a system that are using some kind of special journals. In other words, we're not going to record every transaction with a journal entry in the general journal or having forms to drive the accounting process, but instead putting that information into a special journal and adding it up for the month and then recording it monthly into the general journal, then making the posting to the general ledger, and then finally the trial balance and the financial statements. The purchases journal is then a particular journal within this type of process within these special journals. So the purchase journal is going to deal with a specific type of transaction. The idea then of these special journals would be to group transactions that are going to be similar in nature. And if they are similar in nature, then we can group the information into columns that will take up less time and less work than recording the entire journal entry in a general journal type transaction. The purchases journal is going to be, I obviously transactions that are involving purchases, but that's going to be a little bit too simplified. We can't really stop there because that's really not the best name for the purchases journal because although we are purchasing stuff with the purchases journal, it is possible to purchase stuff and not have a transaction that would belong in the purchases journal. It might better be called the purchases on account or the purchases and accounts payable journal because that's what's really going on here. We're talking about purchases when we purchase something on credit, on account, meaning we have purchased something and we owe something in the future. And that transaction is going to be fairly standard and therefore the purchase journal works well. However, it works really well if the purchase that we are making is always the same. For example, if we always are buying inventory on account and the transaction for a general ledger type of transaction then would be to debit the inventory and credit accounts payable. That would be if we have a lot of transactions that deal with accounts payable. In other words, we deal with accounts payable almost exclusively for the purchase of inventory. Then we can basically have just one line item, one column on the purchases journal and that one number for each transaction could represent both the debit and credit, the debit to inventory and credit to the accounts payable that we can then sum up through in the entire month. That would be the ideal situation where we have a very similar transaction. Now it is possible of course to use the purchases journal for other things that are dealing with accounts payable, anything that we're buying on account. So if we are using accounts payable for something like expenses then we may still put that in the purchases journal for buying even an auto expense or if we have supplies that we're purchasing we may still use the purchases journal increasing the accounts payable with a credit and then possibly adding another column for the other side of things and or using another type column that will then have to break out at the end of the time period. Now the purchase of journal will add things up through the time period whether that be the day the month or the year typically it's going to be a month or day or week or month typically we're talking about a month worth of information and once the month is over we would sum up that information in the purchases journal and then record that information to the general journal instead of recording all transactions that we were going to record one by one in the general journal just one transaction for that time period for that month that we then post to the general ledger and we can then make the trial balance and the financial statements from that general ledger. So the key point here on the purchases journal is that it's a special journal number one it's going to be used for purchases however it's only going to be used for purchases on account it's really an accounts payable journal that means that if purchases are made for example cash then it would not go in the purchases journal it would go into the cash receipts journal the purpose of the purchases journal is to simplify transactions lower the amount of data input that we need to do throughout the month by only recording them into the journal in a simplified way summing that entire information up and then just recording one journal entry into the general journal at the end of the time period