Q.From the following transactions of Kavya Traders for March 2026, prepare the Purchases Book, and state the amount to be posted to the debit of the Purchases Account:
March 2 — Purchased from Ramesh & Co. on credit: 100 units @ ₹50 each, less trade discount 10%.
March 10 — Purchased from Suresh Traders on credit: 50 chairs @ ₹800 each, less trade discount 5%.
March 18 — Purchased office furniture on credit from Modern Furniture Mart for ₹15,000.
March 25 — Purchased from Ramesh & Co. on credit: 200 units @ ₹60 each, less trade discount 10%.

Only credit purchases of trading goods, net of trade discount, are entered in the Purchases Book — the furniture bought on credit is an asset, not goods, so it is excluded here and belongs in the Journal Proper instead.

March 2: 100 × ₹50 = ₹5,000, less 10% trade discount ₹500 = ₹4,500. March 10: 50 × ₹800 = ₹40,000, less 5% ₹2,000 = ₹38,000. March 18 is excluded — furniture is not goods the business trades in. March 25: 200 × ₹60 = ₹12,000, less 10% ₹1,200 = ₹10,800.

Each transaction is tested against one rule: is this a CREDIT purchase of goods the business trades in? If yes, it belongs in the Purchases Book, at its net (post-trade-discount) value; if no, it is excluded from the Purchases Book entirely.

The March 18 purchase of office furniture, though bought ON CREDIT, is excluded from the Purchases Book because furniture is a fixed asset meant for use in the business, not goods meant for resale. It is instead recorded in the Journal Proper: Furniture A/c Dr ₹15,000; To Modern Furniture Mart A/c ₹15,000.

Posting: the Purchases Book total of ₹53,300 is posted to the debit of the Purchases Account. Individually, ₹4,500 + ₹10,800 = ₹15,300 is posted to the credit of Ramesh & Co.'s account, and ₹38,000 to the credit of Suresh Traders' account.

The most common error is including the credit purchase of an asset (like furniture) in the Purchases Book simply because it was bought on credit — the deciding factor is always whether the item is GOODS the business trades in, not merely whether the purchase was on credit. A second common error is entering the gross amount instead of deducting the trade discount first.