PURCHASE LEDGER Meaning and
Definition
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A purchase ledger is an accounting record that tracks and keeps a systematic record of all purchases made by a company. It is a subset of the general ledger and is specifically dedicated to recording and organizing all the purchases made from suppliers or vendors.
The purchase ledger serves as a detailed logbook that contains crucial information such as the date of purchase, supplier name, item description, quantity purchased, unit price, total cost, and payment terms. By keeping an accurate record of all purchases, the purchase ledger enables businesses to have a comprehensive overview of their procurement activities and assists in managing cash flow.
The ledger provides a clear picture of the company's liabilities by tracking outstanding invoices and payments due to suppliers. This assists in ensuring that the company remains in good financial standing and avoids unnecessary penalties or late fees.
Furthermore, the purchase ledger plays a vital role in the reconciliation process. It helps to match purchase invoices against delivery notes, purchase orders, and other supporting documents to ensure that the amounts billed by suppliers are accurate and agreed upon.
Overall, the purchase ledger is an essential financial tool that enables organizations to monitor and control their purchasing activities effectively. It plays a pivotal role in maintaining accurate financial records, managing cash flow, and ensuring timely payment of suppliers.
Common Misspellings for PURCHASE LEDGER
- ourchase ledger
- lurchase ledger
- 0urchase ledger
- pyrchase ledger
- phrchase ledger
- pjrchase ledger
- pirchase ledger
- p8rchase ledger
- p7rchase ledger
- puechase ledger
- pudchase ledger
- pufchase ledger
- putchase ledger
- pu5chase ledger
- pu4chase ledger
- purxhase ledger
- purvhase ledger
- purfhase ledger
- purdhase ledger
- purcgase ledger
Etymology of PURCHASE LEDGER
The word "purchase" originates from the Middle English word "purchacen", which means "to acquire" or "to obtain". It traces its roots back to the Old French word "pourchacier", meaning "to chase after" or "to seek".
Meanwhile, "ledger" comes from the Old English word "lecgan", which means "to place" or "to lay". It can also be traced back to the Old English word "laecce", meaning "book" or "account".
The combination of these two words, "purchase" and "ledger", forms the term "purchase ledger", which refers to a book or an accounting record that keeps track of all purchases made by a business.
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