Multiple choice

In a purchase book, goods purchased on _______ are recorded.

  1. cash

  2. credit

  3. Both cash and credit

  4. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The purchase book, or purchase journal, is specifically designed to record the credit purchase of goods intended for resale. Cash purchases are recorded in the cash book, not the purchase book. Only transactions involving inventory bought on credit from suppliers are entered here.