Introduction:
When a fixed asset is bought on credit, it means that the payment for the asset will be made at a later date, usually after a specified period of time. In this scenario, the transaction does not involve cash, but it still needs to be recorded in the books of accounts. The appropriate book to record this transaction would be the Purchase Book, which is used to record credit purchases.

Explanation:
The Purchase Book is a subsidiary book that is used to record all credit purchases of goods and fixed assets. It is a specialized book that is separate from the Cash Book, which is used to record cash transactions. Fixed assets are long-term assets that are used in the production or operation of a business and are not intended for resale. Examples of fixed assets include land, buildings, machinery, and vehicles.

When a fixed asset is bought on credit, the transaction is recorded in the Purchase Book. This book provides a detailed record of all credit purchases made by the business, including the purchase of fixed assets. The entry in the Purchase Book will include the date of the purchase, the name of the supplier, the description of the asset, the quantity, the price, and any other relevant details.

The Purchase Book serves as a source document for posting the transaction to the general ledger. The entry in the Purchase Book is then posted to the appropriate ledger accounts, such as the Fixed Assets Account and the Accounts Payable Account. The Fixed Assets Account is a nominal account that is used to record the cost of acquiring fixed assets, while the Accounts Payable Account is a personal account that is used to record amounts owed to suppliers.

By recording the purchase of fixed assets in the Purchase Book, the business can maintain an accurate record of its credit purchases and track its liabilities. This ensures that the financial statements reflect the true financial position of the business and provides the necessary information for decision-making and analysis.

Conclusion:
When a fixed asset is bought on credit, it is recorded in the Purchase Book, which is used to record credit purchases. This book provides a detailed record of all credit purchases made by the business, including the purchase of fixed assets. By recording these transactions in the Purchase Book, the business can maintain an accurate record of its credit purchases and track its liabilities, ensuring the financial statements reflect the true financial position of the business.