NEW YORK (CNN/Money) - Federal investigators are turning their inquiry into the accounting practices at AOL Time Warner's America Online division to the unit's relationship with software firm PurchasePro.com, according to published reports Friday.

The companies had an agreement in 2000 by which AOL would sell PurchasePro software in return for warrants to purchase shares in the Las Vegas-based company at a discount, according to the Wall Street Journal and the Washington Post.

When it exercised the warrants, which are similar to options, America Online booked income from the equity sales as advertising revenue. The Journal said accounting experts consider that a "gray area" of accounting, and that such sales generally are regarded as one-time investment gains.

Former PurchasePro CEO Charles Johnson said AOL's practice of booking the equity sales as revenue seemed unusual to him. "They were selling software [for PurchasePro] and they got warrants for selling it," he told the Journal. "I don't know how those become ad revenues."

A PurchasePro spokesman confirmed to CNNfn Friday that the company had received an inquiry from the SEC about the AOL transaction, but he couldn't confirm reports that it has been asked for documents dealing with the transaction.

AOL, which has maintained it followed proper accounting practices in all areas of inquiry, told the Journal it disclosed the fact that it occasionally booked equity sales as revenue in its 1999 annual report. "The company may receive a warrant to purchase stock or may purchase or acquire a direct investment in the partner. These equity investments are accounted for in accordance with company accounting policies," the paper quoted the report.

Several AOL executives said the focus of the investigation is PurchasePro, which PurchasePro denied, the Journal reported.

America Online suspended an aide to company executive David Colburn in May 2001 as part of the company's investigation into its PurchasePro partnership, the Post reported. AOL did not comment on that move to the Post.

AOL Time Warner, the parent company of CNN/Money, said Wednesday that the Department of Justice joined the Securities and Exchange Commission in the accounting probe.

Shares of AOL Time Warner (AOL: down $0.70 to $10.31, Research, Estimates) and PurchasePro.com (PPRO: down $0.03 to $0.30, Research, Estimates) were down slightly Friday morning.