We are going to learn the meaning of very expensive words
in this clip, watch it carefully
PURCHASES Now you will think, what is the meaning of
PURCHASE?
Do we know the meaning of PURCHASE?
Friends, the basic confusion in accounts is caused by
mixing the words of ACCOUNTS and ENGLISH
The child thinks I know the meaning of PURCHASE
PURCHASE means to buy anything in English
So if anything is bought in business, it will become
PURCHASE
Whereas in accounting, PURCHASE means only those things
which you are buying to sell
For example, my showroom is to sell T-shirts
So the T-shirts I will buy will be called PURCHASE in
accounts
If I am buying a counter, I was buying a T-shirt to sell,
it will be called PURCHASE
I am buying a counter to use, it will not be called PURCHASE
It will be called ASSET
Buying goods is called PURCHASE
Buying assets is not called PURCHASE
It refers to the amount of goods which are bought for
release
PURCHASES means the amount of goods that we have bought to
sell and the amount of raw materials that are used in the
production process
One more thing, if we have bought raw materials, it will
also be called PURCHASE
For example, we have a soap factory
So we have bought chemicals as raw materials
We will refine the chemicals, process it and it will become
a soap
So the raw materials which we have bought will also be
called PURCHASE
If you are buying something which you are going to sell or
if you are buying something which you are going to use to
make goods
We call their PURCHASE as PURCHASES in accounts
PURCHASE of anything else will not be called PURCHASE in
accounts
And if the PURCHASE is cleared, it will be called PURCHASE
in returns
If the purchased goods are defective, you have returned it
What will be called PURCHASE in returns?
If the purchased goods are defective, you have returned it
What will be called PURCHASE in returns?
I have bought 100 T-shirts because I have to sell them
So my PURCHASE is of 100 T-shirts
I will call PURCHASE of 100 T-shirts as PURCHASES in
accounts
But I have seen 3 T-shirts were defective
I have returned 3 T-shirts which are defective
So those 3 T-shirts will be called PURCHASES in returns
The purchased goods which I have returned will be called
PURCHASES in returns
That is the thing which I have brought to sell
If that thing is returned, it will be called PURCHASES in
returns
Sales means the sale of goods
The purchased goods which you are going to sell will be
called PURCHASE in returns
And when you sell it, it will become SALE
That is, the sale of goods is called SALE in returns
Nothing is called SALE in returns
SALE means the sale of goods
The thing which you have brought to sell is called SALE in
returns
If you are selling machinery, it will not be called SALE in
returns
Sir, we have seen the words SALE OF MACHINERY
There the word SALE means English SALE or Accounts SALE
You will not take it in trading account, you will take it
in BUY SALE
Have you ever seen machinery written in trading account?
Machinery sale is called BUY SALE
What is written in trading account?
BUY SALE
Which sale?
SALE OF GOODS
Ok Sir
Sales refers to the amount of goods sold that have already
been bought or manufactured by the business
The thing which you are buying and selling, that thing is
SALE i.e.
And if you are making something and selling it, it will
also be called SALE
Like I gave an example of SOAP
When SOAP will be made and sold, it will also be called SALE
To make and sell or to buy and sell
If the purpose is to buy and sell, then its sale will be
called SALE
The purpose of buying an item is to sell
The purpose of manufacturing an item is to sell
It will be called SALE
It includes both cash and credit sales
SALES RETURN
Returning purchased items
Returning sold items
PURCHASE RETURN
Returning purchased items
PURCHASE RETURN
Returning sold items to the defective person
SALE RETURN
Even if he doesn't like it, he returns it to us
Even then it becomes SALE RETURN
Buying and selling the thing which is going to be sold or
manufacturing the thing which is going to be sold
Or buying raw material
PURCHASE RETURN
Returning these things back is PURCHASE RETURN
The thing which was bought or manufactured to be sold
When it is sold, it is SALE
And when the thing is defective due to some other reason
Then it is called SALE RETURN
PURCHASE, PURCHASE RETURN, SALE, SALE RETURN
We have seen this in this clip
THANK YOU