What is a purchase ledger? #
A purchase ledger is a sub-ledger or subsidiary ledger that is used to record all of a company’s purchases of goods and services. The purchase ledger is a detailed record of the company’s accounts payable, and it contains information about all the transactions that the company has made with its suppliers. The purchase ledger is a part of the overall financial records of a company and is used to ensure that all the company’s purchases are accurately recorded and tracked.
What is the purchase ledger for? #
The purchase ledger records all the details of each purchase, including the purchase date, the supplier’s name, the purchase order number, the invoice number, the quantity and price of the goods or services, the terms of payment, and the amount due. It also records the payment made to the supplier, and the outstanding balance if any.
The purchase ledger is important as it provides a detailed record of all the purchases made by a company, it helps to ensure that the company is paying the correct amount to the suppliers, and it provides a basis for the preparation of financial statements such as balance sheet and income statement. It also serves as a reference for budgeting, forecasting, and auditing and it can be used to reconcile with the general ledger.