Accounting 3
This presentation is the property of its rightful owner.
Sponsored Links
1 / 20

Accounting 3 PowerPoint PPT Presentation


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

Accounting 3. Chapter 18 Section 1. Vocabulary. Corporation- An organization with the legal rights of a person and which may be owned by many persons. Share of Stock- Each unit of ownership in a corporation. Capital Stock- Total shares of ownership in a corporation.

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 1


Vocabulary

Vocabulary

  • Corporation- An organization with the legal rights of a person and which may be owned by many persons.

  • Share of Stock- Each unit of ownership in a corporation.

  • Capital Stock- Total shares of ownership in a corporation.

  • Special Journal- A journal used to record only one kind of transaction.


Differences between ownerships

Differences Between Ownerships

  • The main difference among the accounting records of proprietorships, partnerships, and corporations is in the capital accounts.

  • Proprietorships and partnerships have a single capital and drawing account for each owner.

  • Corporations have separate capital accounts for the stock issued and the earnings kept in the business.


Special journals

Special Journals

  • A General Journal is used in a corporation.

  • Four types of special journals are used in corporations:

    • Purchases (discussed in this section)

    • Cash Payments

    • Sales

    • Cash Receipts


Purchases journal

Purchases Journal

  • This journal is used only to record purchases of merchandise on account.

  • A purchase on account can be recorded on one line.

  • There is only one special amount column.

  • Each entry in this column is both a debit to Purchases and a credit to Accounts Payable. (This is just combining the same two columns from the expanded journal used in Accounting 2.)


Purchases journal1

Purchases Journal

  • Instead of a Doc. No. column, a Purch. No. column is used. This is due to purchase invoices as the only source document in this journal.

  • Instead of an Account Title column, an Account Credited column is used. This is done because you must specify which company the merchandise was purchased from and credit that account in the accounts payable ledger.


Example of purchases journal

Purchases Journal

Page ___

Purch.

No.

Post

Ref.

Purchases Dr.

Acct Pay Cr.

Date

Account Credited

Example of Purchases Journal


Journalizing purchases on account

Purchases

Accounts Payable

7,254.00

7,254.00

Pro Golf Company

7,254.00

Journalizing Purchases on Account

  • Example Transaction: March 2. Purchased merchandise on account from Pro Golf Company, $7,254.00. Purchase Invoice No. 179.

  • Accounts Effected:

  • Visual steps for completion on next slide.

General Ledger

Accounts Payable Ledger


Journalizing purchases on account1

Purchases Journal

Page ___

Purch.

No.

Post

Ref.

Purchases Dr.

Acct Pay Cr.

Date

Account Credited

Journalizing Purchases on Account

3

Mar

2

Pro Golf Company

179

7 2 4 5 00


Posting from purchases journal to accounts payable ledger

Posting from Purchases Journal to Accounts Payable Ledger

  • The amount on each line of a purchases journal is posted as a credit to the vendor account in the accounts payable ledger.

  • The posting reference used for the purchases journal is P along with the page number of the transaction. (P3 for this one)

  • Once posting is done, posting references must be entered on the purchases journal page.

  • Visual steps on next slide.


Posting from a purchases journal to an accounts payable ledger

Account

Acct No.

Post

Ref

Credit

Balance

Date

Item

Debit

Credit

Posting from a Purchases Journal to an Accounts Payable Ledger

Pro Golf Company

260

Mar

1

Balance

3 6 8 1 00

2

P3

7 2 5 4 00

10 9 2 6 00


Posting from purchases journal to a general ledger

Posting from Purchases Journal to a General Ledger

  • At the end of the fiscal period, the purchases journal must be ruled and totaled.

  • Once this is done, the total must be posted in the General Ledger in both the Purchases and Accounts Payable accounts.

  • Visual steps on next two slides.


Accounting 3

Purchases Journal

Page ___

Purch.

No.

Post

Ref.

Purchases Dr.

Acct Pay Cr.

Date

Account Credited

3

Mar

2

Pro Golf Company

179

7

2

5

4

00

260

31

Raffo Company

180

270

3 7 1 0 00

31

Total

10 9 6 4 00

(5105) (2115)

*These should be entered after totals have been posted into the general ledger.


Accounting 3

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

23 8 8 7 00

1 2 0 00

24 0 0 7 00

29

G4

31

P3

10 9 6 4 00

34 9 7 1 00

Purchases

5105

Mar

1

Balances

72 3 7 4 00

16

CP6

2 4 0 00

72 6 1 4 00

31

P3

10 9 6 4 00

83 5 7 8 00


Work together p 459

Look at postings after each step is complete and use the back button to get to the next step. Once finished, this is the end of section 1.

Purchases Journal

Page ___

Purch.

No.

Post

Ref.

Purchases Dr.

Acct Pay Cr.

Date

Account Credited

Work Together p. 459

4

Apr

2

Farris, Inc.

45

220

1 7 0 0 00

Post

5

Delta Manufacturing

46

210

3 2 6 5 00

Post

8

Williams Company

47

230

7 8 0 00

Post

30

Total

5 7 4 5 00

Post

(2115) (5105)

Assignment

*These should be entered after the totals have been posted.

*These should be entered after the credit to vendor account has been posted.


Accounting 3

Account

Acct No.

Post

Ref

Credit

Balance

Date

Item

Debit

Credit

Delta Manufacturing

210

Apr

1

Balance

2 2 4 5 00

5

P4

3 2 6 5 00

5 5 1 0 00


Accounting 3

Account

Acct No.

Post

Ref

Credit

Balance

Date

Item

Debit

Credit

Farris, Inc.

220

Apr

1

Balance

1 2 5 7 00

2

P4

1 7 0 0 00

2 9 5 7 00


Accounting 3

Account

Acct No.

Post

Ref

Credit

Balance

Date

Item

Debit

Credit

Williams Company

230

Apr 8 P4 7 8 0 00 7 8 0 00


Accounting 3

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

Apr 1 Balance 8 7 6 0 00

30 P4 5 7 4 5 00 14 5 0 5 00

Purchases

5105

Apr 1 Balance 18 7 8 1 00

30 P4 5 7 4 5 00 24 5 2 6 00


Assignment

Assignment

  • Do Application 18-1 on page 477 by hand.

  • Turn it in to Mrs. Middleton.

  • Move on to section 18-2.


  • Login