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Hello tutor,
I am a little unsure of how a purchase daybook works.
1) A purchase daybook does not have to be a manual book, right?
2) Is the following process of recording purchase invoices correct? It will not be a complete one, but I just want to make sure that I understand how a purchase daybook works.Purchase invoices should be input into the purchase daybook on a daily basis in batches with the use of a batch control sheet.
If this is not practical, the invoices should be filed with each attributed a sequential number. When the finance clerk inputs the invoices into the purchase daybook, he should check that there are no breaks in sequence.
The purchase daybook should automatically update the purchase ledger on a weekly basis, and the purchase ledger should then automatically update the general ledger. This update should be reviewed by the finance director through a purchase ledger control account reconciliation.
Hope you could help me on this, thank you 🙂
1 Correct.
2 The PDB is just a list of invoices received. A sequential number might be allocated.
The PDB is a book of prime entry from where the ledgers are updated. Updates cojld be daily, weekly, or even monthly (unusual).
The totals of the PDB pages are used to Dr Purchases, Cr Payables.
Each line in the PDB is also used Cr each relevant account in the payables ledger.
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