Accounting 3
This presentation is the property of its rightful owner.
Sponsored Links
1 / 17

Accounting 3 PowerPoint PPT Presentation


  • 51 Views
  • Uploaded on
  • Presentation posted in: General

Accounting 3. Chapter 18 Section 4. General Journal. For corporations, general journals are used to record any information that will not go into any of the special journals. This usually includes any transactions involving memorandums. General Journal. Page ___. Doc. No. Post Ref. Date.

Download Presentation

Accounting 3

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Accounting 3

Accounting 3

Chapter 18

Section 4


General journal

General Journal

  • For corporations, general journals are used to record any information that will not go into any of the special journals.

  • This usually includes any transactions involving memorandums.


Example of general journal

General Journal

Page ___

Doc.

No.

Post

Ref.

Date

Account Title

Debit

Credit

Example of General Journal


Purchases returns and allowances

Purchases Returns and Allowances

  • When customers do not want to keep merchandise that is inferior or damaged, they may be allowed to return it. This credit is called a Purchases Return.

  • When customers’ merchandise is damaged but still usable, they may be allowed a credit off of what is owed for that merchandise. This credit is called a Purchases Allowance.


Debit memorandums

Debit Memorandums

  • A Debit Memorandum is a form prepared by the customer showing the price deduction taken by the customer for returns and allowances.

  • It is called a debit memorandum because the customer records the amount as a debit (deduction) to the vendor account to show the decrease in the amount owed.


Example of debit memorandum

Example of Debit Memorandum

Debit Memorandum 78

Date: _______________

March 8, 2007

To:

Second Round, Inc.

162 Webster Road

Miami, FL 33127-6214

Winning Edge, Inc.

1420 College Plaza

Atlanta, GA 30337-1726

Account Number:

280

Quantity Units Description Price Total

22

Dz.

Grade 2 driving range golf balls, your invoice number 16724, are being returned by mail. Our order specified grade 3 golf balls.

6.50

143.00


Journalizing purchases returns and allowances

Journalizing Purchases Returns and Allowances

  • Purchases returns and allowances decrease the amount of purchases. Therefore, Purchases Returns and Allowances is a contra account (an account that reduces a related account on a financial statement) to Purchases.

  • Purchases Returns and Allowances has a normal credit balance.

  • Example transaction and visual steps on next slide.


Accounting 3

General Journal

Page ___

Doc.

No.

Post

Ref.

Date

Account Title

Debit

Credit

Both the Accounts Payable and Second Round, Inc. accounts must be debited for this transaction. Rather than taking up two lines for the accounts debited (and also un-balancing the accounting equation), Accounts Payable and Second Round, Inc. must be written on the same line.

The second line of any entry in the general journal needs to be indented.

March 8. Returned merchandise to Second Round, Inc., $143.00, covering Purchase Invoice No. 230. Debit Memorandum No. 78.

3

Mar

8

Accounts Pay/ Second Round, Inc.

DM78

1 4 3 00

Purchases Ret. and Allowances

1 4 3 00


Journalizing buying supplies on account

Journalizing Buying Supplies on Account

  • This is handled just like supplies has always been except that Accounts Payable and the vendor account name must be on the credit line of the entry.

  • Example Transaction: March 9. Bought supplies on account from Winter Supplies, $316.00. Memorandum No. 26.

  • Visual steps on next slide.


Accounting 3

General Journal

Page ___

Doc.

No.

Post

Ref.

Date

Account Title

Debit

Credit

3

Mar

9

Supplies

M26

3 1 6 00

Accounts Pay/ Winter Supplies

3 1 6 00


Posting from a general journal

2115

450

Posting from a General Journal

  • Posting must be done individually to all accounts involved in each entry.

  • Most accounts will be in the general ledger. However, vendor accounts are in the Accounts Payable ledger.

  • The posting reference for the general journal is a G along with the page number.

  • On the lines which use two accounts, both account numbers must be included in the posting reference column of the general journal. Ex.

  • Posting will be demonstrated in the Work Together problem.


Work together p 475

General Journal

Page ___

Doc.

No.

Post

Ref.

Date

Account Title

Debit

Credit

Work Together p. 475

3

Mar

3

Accounts Pay/ Trainor Company

DM18

2115

2 3 8 00

450

Purchases Ret. and Allowances

5115

2 3 8 00

5

Supplies

M355

1140

1 5 2 00

Accounts Pay/ Hughes Supply

2115

1 5 2 00

420

7

Store Equipment

M356

1215

4 2 3 5 00

Accts Pay/ Retail Displays, Inc.

2115

4 2 3 5 00

430

To see the postings, click on the posting reference numbers which are hyperlinked.

Assignment


Accounting 3

General Ledger

Account

Account

Acct No.

Acct No.

Post

Ref

Post

Ref

Date

Date

Item

Item

Debit

Debit

Credit

Credit

BALANCE

BALANCE

DEBIT

DEBIT

CREDIT

CREDIT

Supplies

1140

Mar 1 Balance 2 7 6 3 00

5 G3 1 5 2 00 2 9 1 5 00

Store Equipment

1215

Mar 1 Balance 12 7 6 1 00

7 G3 4 2 3 5 00 16 9 9 6 00


Accounting 3

General Ledger

Account

Account

Acct No.

Acct No.

Post

Ref

Post

Ref

Date

Date

Item

Item

Debit

Debit

Credit

Credit

BALANCE

BALANCE

DEBIT

DEBIT

CREDIT

CREDIT

Accounts Payable

2115

Mar 1 Balance 3 1 3 1 00

3 G3 2 3 8 00 2 8 9 3 00

5 G3 1 5 2 00 3 0 4 5 00

7 G3 4 2 3 5 00 7 2 8 0 00

Purchases Returns and Allowances

5115

Mar 1 Balance 6 9 2 00

3 G3 2 3 8 00 9 3 0 00


Accounting 3

Accounts Payable Ledger

Account

Account

Acct No.

Acct No.

Post

Ref

Post

Ref

Credit

Balance

Credit

Balance

Date

Date

Item

Item

Debit

Debit

Credit

Credit

Hughes Supply

420

Mar 1 Balance 4 7 2 00

5 G3 6 2 4 00

Retail Displays, Inc.

430

Mar 1 Balance 1 6 8 7 00

7 G3 4 2 3 5 00 5 9 2 2 00


Accounting 3

Accounts Payable Ledger

Account

Acct No.

Post

Ref

Credit

Balance

Date

Item

Debit

Credit

450

Trainor Company

Mar 1 Balance 9 7 2 00

3 G3 2 3 8 00 7 3 4 00


Assignment

Assignment

  • Do Application 18-5 by hand.

  • Turn it into Mrs. Middleton.

  • Complete Master 18-7 on the computer.

    • Follow instructions from Browser window.

    • Print all journals and ledgers used.

  • Turn into Mrs. Middleton.

  • Move on to Chapter 19 Section 1.


  • Login