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Adjusted purchase


bsai partish   15 August 2020

bsai partish

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why adjusted purchase is an expense?

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sabyasachi mukherjee   16 August 2020

sabyasachi mukherjee

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Purchase is a nominal account.

bsai partish   16 August 2020

bsai partish

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Purchase can also be a real account right

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sabyasachi mukherjee   17 August 2020

sabyasachi mukherjee

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But considerable approach is considered.

Manzil Arora (Others)     20 August 2020

Manzil Arora
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Hi Bsai

Adjusted purchase is net of opening stock, purchase during the year, return during the year and closing stock; that is Opening stock + Purchases - returns - closing stock. If you analyse this formula you can see that the amount you get will be the material used during the year i.e. a direct expense. Thus, Adjusted purchase is an expense.

Further, Real accounts are those reported in balance sheet and Nominal accounts are those reported in Statement of P&L. Since Purchases belongs to P&L, it will be nominal account (debit what comes in = material).


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