I am a beginner in Accounting studies and having a hard time identifying the nature of Purchase and Sales A/C ( and respective Returns A/C). Can anyone please explain the type to which these accounts belong to as per traditional and modern approach.
regards,
nirvan.
Both purchases and sales A/c( respective returns A/c) are nominal A/c. Purchases is a core business expense and Sales is a core Business income, so its a nominal A/c.
Purchase A/c is debited and sales A/c is credited as per the golden rules of Accounting applicable for nominal A/cs.
Thanks very much Faiz.
regards,
Nirvan.
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