Purchasing office furniture is a standard transaction to make in any enterprise. You should account for this transaction correctly in your books. Enter the purchase furniture journal entry. The above entry is for the purchase of furniture for cash or on credit. You consider the furniture to be a fixed asset, not an expense. You will either pay cash, in which case you need to debit the furniture account and credit the cash account. A purchase furniture journal entry is a statement that shows the entry of the purchase of the furniture in a journal. It is a journal entry written to register furniture purchase for business use. When you pay immediately, you record the purchase furniture for a cash journal entry. If you have purchased credit furniture, you write a purchase furniture on credit journal entry. You also present furniture as an asset because it stays a long time in the business. It is not recorded as a regular purchase or expense.
What is Purchase of Furniture in Accounting?
Furniture refers to the movable items like tables, cupboards, cabinets, and desks used in an office or shop. In accounting, you must treat furniture as fixed asset. It is not a stationery and goods use every day. Therefore, you have been using it for on and off for over a year, adding it to your balance sheet.
Why to Treat Furniture Like an Asset
You classify furniture as property, plant and equipment. It helps you:
- Inventory your office or shop equipment
- Be aware of how much is tied up in long-term assets
- Make annual depreciation calculations
- Reflect true value of business assets
Furniture is not something you show to be under “Purchases,” because purchases are typically things that you buy for resale or stock. You create a new account say Furniture A/c.
Purchased Furniture for Cash Journal Entry
When you pay cash or directly from your bank account as you would when purchasing furniture, you should treat it as a cash purchase. Purchased furniture for cash journal entry is the journal entry for a furniture purchased for cash.
Journal Entry Format
| Particulars | Debit ₹ | Credit₹ |
| Furniture A/cTo Bank A/c/Cash A/c(Being furniture purchased for cash) | ₹X | ₹X |
Debit the Furniture A/c because it gets added to your fixed assets. You will make the entry to the Cash or Bank A/c because cash goes out.
Example:
You buy a table and cupboard for ₹20000 and gives payment by cash.
Furniture A/c Dr ₹20,000
To Cash A/c ₹20,000
(Purchasing with cash furniture for sale for extra low laws)
This is a purchase of furniture journal entry for this purchase when payment is made instantly. Small business paying cash for a small furniture purchase is a typical type of journal.
Purchase Furniture on credit Journal Entry
In some cases, you don’t pay for the furniture right away. You get some days to pay. This is a credit purchase. You need to book a liability on your books.”
Journal Entry Format
| Particulars | Debit ₹ | Credit₹ |
| Furniture A/cTo Creditor’s A/c(Being furniture purchased on credit) | ₹X | ₹X |
You debit the account for the furniture to increase the asset. You credit the debtor’s account because you owe them money.
Example:
You purchase ₹30,000 worth office chairs from Ram & Co. on credit.
Furniture A/c Dr ₹30,000
To Ram & Co. A/c ₹30,000
(As if it were furniture bought on credit from Ram & Co.)
This is the furniture purchased on credit journal entry.
Later, when you pay Ram & Co., you make this entry:
Ram & Co. A/c Dr ₹30,000
To Cash/Bank A/c ₹30,000
This finalizes the transaction. This transaction is significant to recognize liabilities properly and aids in vendor reconciliation.
Purchase Furniture for Office Use Journal Entry
You treat the furniture you buy for business or office use as an asset, and not an expense. The purchased furniture for office use journal entry— even if it’s a one-time purchase.
Journal Entry Format
| Particulars | Debit ₹ | Credit₹ |
| Furniture A/cTo Bank A/c/Cash A/c(Being furniture purchased for office use) | ₹X | ₹X |
If it is on credit, move the credit side to the vendor’s name.
This notation will help demonstrate that the furniture is business property. This also aids in working out depreciation and capital value in a balance sheet.
Example:
You purchase a reception table and visitor chairs for ₹45,000 through bank transfer.
Furniture A/c Dr ₹45,000
To Bank A/c ₹45,000
(Balance-sheet furniture, acquired through a bank)
Now this is a basic purchase office furniture journal entry.
Purchased Furniture from Ram Journal Entry
If you take furniture through Ram kind of supplier or named person, you need to put his account in your books. That keeps your ledger up to date and supports your payments tracking.
Journal entry format (credit method)
| Particulars | Debit ₹ | Credit₹ |
| Furniture A/cTo Ram A/c(Being furniture purchased on credit from ram) | ₹X | ₹X |
Later, when you pay Ram:
Ram A/c Dr [Amount]
To Bank/Cash A/c [Amount]
Example:
You purchase a sofa and table from Ram on credit for ₹22,000 on 5th May.
Furniture A/c Dr ₹22,000
To Ram A/c ₹22,000
On May 15, you pay Ram:
Ram A/c Dr ₹22,000
To Bank A/c ₹22,000
Both stages of the journal entry from the purchased furniture from Ram to record the furniture.
Difference Between Purchase of Furniture and Purchase of Goods
Now, the statement is about purchase of furniture and purchase of goods, the difference being based on their intention of use/ accounting treatment. Furniture is an investment for trade, as well as other derivatives of both – they are buying for resale. Furniture is an asset because it cannot sell in normal business operation. Goods, on the other hand, come into the category of trading inventory and therefore are recorded in the trading account as purchases. Many students get confused between normal purchases and fixed asset purchases. Let us clarify it.
| Criteria | Furniture Purchase | Goods Purchase |
| Purpose | For business use | For resale |
| Account Debited | Furniture A/c | Purchase A/c |
| Shown in | Fixed Assets (Balance Sheet) | Trading A/c (Profit & Loss A/c) |
| Journal Entry Format | Furniture A/c Dr → To Cash/Vendor | Purchase A/c Dr → To Cash/Vendor |
This table helps you see why purchase of furniture journal entry is not the same as recording goods purchases.
Furniture Purchased Journal Entry in Tally:
If you are working on Tally for accounting then you need to pass this entry through Journal Voucher or Payment Voucher.
How to Pass in Tally:
- Go to Accounting Vouchers
- Press F5 (Payment) (or F7 (Journal) if applicable
- Debit: Furniture A/c
- This is the cash/bank or vendor account that is credited.
- Add narration and save
Ledger Creation
- Fixed Assets → Under Furniture A/c
- Cash A/c → Under Cash-in-Hand
- Bank A/c → Under Bank Accounts
- Ram A/c → Under Sundry Creditors
This entry is automatically displayed in your asset register and day book in Tally. You can even monitor vendor payments from the ledger.
Common Errors When Recording Purchase Furniture Journal Entry
Even professional bookkeepers can make mistakes. Avoid the following:
- We have not recorded furniture under Purchases A/c
- Long-term cost of furniture vs furniture as expense
- Not maintaining fixed asset ledger in Tally
- Ignoring GST or taxes if applicable
- Mistaking vendor name or account categorization
Also, remember to follow the golden rules of accounting and classify the accounts properly. Make sure to practice sample entries so you do not make errors.
Relevance to ACCA Syllabus
For ACCA’s Financial Accounting (FA) and Financial Reporting (FR) papers, students need to understand how to classify assets correctly and apply double entry bookkeeping. The correct purchase furniture journal entry is critical to ensure accuracy in fixed asset accounting to avoid common mistakes in examination scenarios.
Purchase Furniture Journal Entry ACCA Questions
Q1: For example, what is the appropriate journal entry when furniture is bought for cash?
A. Furniture A/c Dr; A/c Purchases A/c
B. Furniture A/c Dr. To Cash A/c
C. Cash A/c Dr; To Furniture A/c
Purchases A/c Dr; So Furniture A/c
Answer: B
Q2: What is the highest level of furniture on the balance sheet?
A. Current Assets
B. Current Liabilities
C. Fixed Assets
D. Expenses
Answer: C
Q3: Ram sells office furniture on credit to a business. What is the correct entry?
A. Furniture A/c Dr. To Ram A/c
B. Cash A/c Debit; Furniture A/c Credit
C. Furniture A/c Dr; To Ram A/c
D. Furniture A/c Dr Furniture A/c Dr; To Purchases A/c
Answer: A
Q4: What principle supports the idea that you record your furniture as an asset not as an expense?
A. Matching Principle
B. Going Concern
C. Capital Expenditure Rule
D. Prudence
Answer: C
Q5: Which account will be credited in a cash purchase when furniture is used as office
A. Capital A/c
B. Bank/Cash A/c
C. Furniture A/c
D. Drawings A/c
Answer: B
Relevance to US CMA Syllabus
CMA Part 1 Acquisition of Fixed Assets and its Accounting Treatment: A comprehensive study on Fixed Assets. CMA candidates should be able to categorize and record capital expenditures such as furniture and use the correct purchase furniture journal entry to ensure accurate financials results and performance metrics.
Purchase Furniture Journal Entry US CMA Questions
Q1: What kind of transaction is it when office furniture is purchased for cash?
A. Revenue expense
B. Capital expenditure
C. Administrative income
D. Deferred liability
Answer: B
Q2: Which type of mortgage affects the account when recording furniture bought on credit?
A. Capital A/c
B. Accounts Payable A/c
C. Furniture Repairs A/c
D. Sales A/c
Answer: B
Q3: In the accounts, where does furniture bought go?
A. Income Statement
B. Current Assets
C. Non-current Assets
D. Operating Expenses
Answer: C
Q4: What is the correct journal entry when a furniture for $10,000 is purchased on credit?
A. Furniture A/c Debit $10,000; To Vendor A/c $10,000
B. Purchases A/c Dr $10,000; To Bank A/c $10,000
C. Furniture A/c Dr 10,000; To Sales A/c 10,000
D. Vendor A/c Dr $10,000; To Furniture A/c $10,000
Answer: A
Q5: How does the purchase of furniture impact the total assets?
A. No effect
B. Assets decrease
C. Assets increase
D. Liabilities decrease
Answer: C
Relevance to US CPA Syllabus
US CPA (FAR) – Fixed Assets: Candidates are tested for Fixed Assets (Recognition, Initial Measurement, and Capitalization), By understanding the journal entry against furniture purchased, this will ensure CPAs align their accurate books with the requirement during an audit period as per GAAP for reporting.
Purchase Furniture Journal Entry US CPA Questions
Q1: An entity purchases furniture for $5,000 with a bank transfer. What is the journal entry?
A. Cash A/c Dr. To Furniture A/c
B. Furniture A/c Dr. To Bank A/c
To Sales A/c C. Furniture A/c Dr
D. Capital A/c Dr. To Furniture A/c.
Answer: B
Q2: How to record furniture in GAAP?
A. As a liability
B. As a prepaid expense
C. As a fixed asset
D. As revenue
Answer: C
Q3: How do you record a purchase of furniture on account?
A. Liabilities up, Assets down
B. Increase in expenses
C. Increase in assets and liabilities
D. No effect
Answer: C
Q4: What does the statement tell you about the effect of purchasing furniture?
A. Income Statement
B. Cash Flow from Financing Activities
C. Balance Sheet
D. Retained earnings statement
Answer: C
Q5: Which is correct entry when the furniture is paid off later?
A. Furniture A/c Dr; To Cash A/c
B. Bank A/c Dr. ; to Vendor A/c
C. Sales A/c Dr; Vendor A/c
D. Capital A/c Debit; To Vendor A/c
Answer: B
Relevance to CFA Syllabus
As per CFA, the assets should also be recognized at an initial measurement, and it is relevant to understand how an asset such as a piece of furniture will impact the overall financials (the concept of capex or capitalizations), and so on. That helps analysts evaluate cash flow, investment activity and balance sheet accuracy in valuation models.
Purchase Furniture Journal Entry CFA Questions
Q1: In any financial analysis, furniture is categorized as:
A. Operating expense
B. Capital asset
C. Deferred revenue
D. Non-operating item
Answer: B
Q2: Which of the following occurs when a company pays for furniture with cash?
A. Increase
B. Decrease
C. No change
D. Increase in liabilities
Answer: B
Q3: How does a furniture purchase affect the investing part of the cash flow statement?
A. No effect
B. Cash inflow from investment increases
C. Reduction in cash outflow for investing
D. Cash outflow for investing increases
Answer: D
Q4: We are building for net income in 1st half of calendar 2023.
A. It increases net income
B. It has no direct effect at first
C. It eliminates net income instantly
D. It also increases retained earnings
Answer: B
Q5: The cost of purchased furniture for valuation analysis is as follows:
A. Expensed in the current period
B. Added to intangible assets
C. Capitalized and depreciated
D. Treated as goodwill
Answer: C
