What is the difference between a purchases day book and a purchases ledger?

What is the difference between a purchases day book and a purchases ledger?

• A. The purchases day book records credit purchases; the purchases ledger is the individual supplier ledger showing balances.
• B. The purchases day book records cash purchases; the purchases ledger records credit purchases.
• C. The purchases day book records sales; the purchases ledger records refunds.
• D. The purchases day book is a ledger; the purchases ledger is a journal.

Answer: (A)

A purchases day book records credit purchases from suppliers as they happen; it’s a book of prime entry used to capture the details before posting. It doesn’t include cash purchases—that would go in the cash book. The purchases ledger is a subsidiary ledger that contains individual supplier accounts, showing how much is owed to each supplier and the history of each balance. Entries from the day book are posted to these supplier accounts, updating the balances. The summary of those balances then reconciles with the general ledger through the purchases ledger control account.

A purchases day book records credit purchases from suppliers as they happen; it’s a book of prime entry used to capture the details before posting. It doesn’t include cash purchases—that would go in the cash book. The purchases ledger is a subsidiary ledger that contains individual supplier accounts, showing how much is owed to each supplier and the history of each balance. Entries from the day book are posted to these supplier accounts, updating the balances. The summary of those balances then reconciles with the general ledger through the purchases ledger control account.