CONFUSED..........Why the answer is this.. explain ...thx

Simple, its a CASH transaction. We'll simply pay the amount at the time of receiving goods & simply receive those purchases. Take it as a simple daily transaction, that we do in our normal routine. For e.g. you're buying a book. You'll ask the salesman if the book is in the shop. If its there, he'll give it to you along with the bill & you'll pay the amount. Nothing else, the transaction is complete. Similarly, in the your example same elements will be used, except that this transaction require all those Purchase Order, Delivery Note, Goods Received Note & Invoice & other (if needed) documents. Hope it helped you.

I think the correct entry is Dr.Purchases $300 and Cr.Cash $300 this is simply because in the transaction they did not specify where the cash was coming from. It could have been bank if they said something like paying through check.

The use of the term 'cash purchase' means that the purchase was for not on credit. The word 'cash' can mean actual bank notes or can mean a cheque for a payment out of the bank account.