Multiple choice

Credit purchase of a machine is entered in the

  1. purchase book

  2. cash book

  3. journal proper

  4. Both 1 and 3
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The purchase book is exclusively for the credit purchase of goods (inventory) meant for resale. Since a machine is a fixed asset and not inventory, its credit purchase cannot be recorded in the purchase book. Instead, it must be recorded in the journal proper, which handles non-routine credit transactions.

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