1 / 31

Chapter 9

Chapter 9. Journalizing Purchases and Cash Payments. 24. Corporations. Corporation – an organization with the legal rights of a person and which many persons may own Share of stock – each unit of ownership in a corporation Capital stock – total shares of ownership in a corporation

lore
Download Presentation

Chapter 9

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. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 9 Journalizing Purchases and Cash Payments

  2. 24. Corporations Corporation – an organization with the legal rights of a person and which many persons may own Share of stock – each unit of ownership in a corporation Capital stock– total shares of ownership in a corporation Stockholder – an owner of one or more shares of a corporation

  3. 25. Purchases & purchases journal Merchandise – goods that a business purchases to sell Merchandising business – a business that purchases and sells goods Retail merchandising business – sells to those who use or consume the goods Wholesale merchandising business – buys and resells merchandise to retail merchandising businesses

  4. 25. Purchases & purchases journal Cost of merchandise – price a business pays for goods it purchases to sell Markup – the amount added to the cost of merchandise to establish the selling price Vendor – a business from which merchandise is purchased or supplies or other assets are bought

  5. 25. Purchases & purchases journal Special journal – a journal used to record only one kind of transaction Five journals we will use: 1. Purchases 2. Cash Payments 3. Sales 4. Cash Receipts 5. General

  6. 25. Purchases & purchases journal Purchases journal – special journal used to record only purchases of merchandise on account Purchase on account – a transaction in which the merchandise purchased is to be paid for later Special amount column – a journal amount column headed with an account title

  7. 25. Purchases & purchases journal Special amount column – a journal amount column headed with an account title Accounting concept: Historical Cost – when the actual amount paid for the merchandise or other items bought is recorded

  8. 2 PURCHASE INVOICE page 238 1 4 3 1. Stamp the date received andpurchase invoice number. 3. Initials of the person whochecked the invoice. 2. Place a check mark by each amount. 4. Review the vendor’s terms. LESSON 9-1

  9. 25. Purchases & purchases journal Purchase invoice – an invoice used as a source document for recording a purchase on account transaction Terms of sale – an agreement between a buyer and a seller about payment for merchandise

  10. PURCHASING MERCHANDISE ON ACCOUNT page 239 November 2. Purchased merchandise on account from Crown Distributing, $2,039.00. Purchase Invoice No. 83. 2 1 3 4 1. Write the date. 2. Write the vendor name. 3. Write the purchase invoice number. 4. Write the amount of the invoice. LESSON 9-1

  11. 1 6 TOTALING AND RULING A PURCHASES JOURNAL page 240 4 5 3 2 1. Rule a single line across the amount column. 4. Add the amount column. 5. Write the total. 2. Write the date. 6. Rule double lines across the amount column. 3. Write the word Total. LESSON 9-1

  12. 26. Cash payments journal Cash payments journal – special journal used to record only cash payment transactions Cash discount – a deduction that a vendor allows on the invoice amount to encourage prompt payment Purchases discount – a cash discount on purchases taken by a customer

  13. 26. Cash payments journal General amount column – journal amount column that is NOT headed with an account title

  14. 1 2 3 4 5 CASH PAYMENT OF AN EXPENSE page 243 November 2. Paid cash for advertising, $150.00. Check No. 292. 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  15. BUYING SUPPLIES FOR CASH page 243 November 5. Paid cash for office supplies, $94.00. Check No. 293. 1 2 3 4 5 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  16. CASH PAYMENTS FOR PURCHASES page 244 November 7. Purchased merchandise for cash, $600.00. Check No. 301. 2 1 3 4 5 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  17. 26. Cash payments journal List price – the retail price listed in a catalog or on an Internet site Trade discount – a reduction in the list price granted to customers *Note: No journal entry is made to show the amount of a trade discount Ex: List price $1,500 less 60% discount

  18. 26. Cash payments journal Cash discount examples: 2/10 n/30 Contra account – an account that reduces a related account on a financial statement Normal balance

  19. 5 6 CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS page 245 November 8. Paid cash on account to Gulf Craft Supply, $488.04, covering Purchase Invoice No. 82 for $498.00, less 2% discount, $9.96. Check No. 302. 1 2 4 3 1. Write the date. 2. Write the account title of the vendor. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. 6. Write the credit amount. LESSON 9-2

  20. CASH PAYMENTS ON ACCOUNT WITHOUT PURCHASES DISCOUNTS page 246 November 13. Paid cash on account to American Paint, $2,650.00, covering Purchase Invoice No. 77. Check No. 303. 1 2 4 5 3 1. Write the date. 2. Write the vendor account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  21. 33. Cash payments journal (con’t) Cash short – petty cash on hand amount that is less than a recorded amount Cash over– petty cash on hand amount that is more than a recorded amount

  22. 1 3 4 5 6 7 PETTY CASH REPORT page 248 1. Write the date and custodian name. 2. Write the fund total. 3. Summarize petty cash payments. 2 4. Calculate and write the total payments. 5. Calculate and write the recorded amount on hand. 8 6. Write the actual amount of cash on hand. 7. Subtract the actual amount on hand from the recorded amount on hand and write the amount. 8. Write the total of the replenish amount. LESSON 9-3

  23. REPLENISHING A PETTY CASH FUND page 249 1. Date 2. Account titles 3. Check number 4. Expense amounts 5. Cash short as a debit; cash over as a credit 6. Total cash payment 4 5 6 1 3 2 LESSON 9-3

  24. 1 6 TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARD page 250 4 2 3 5 1. Rule a single line. 2. Write the date. 3. Write the words Carried Forward in the Account Title column. 4. Place a check mark in the Post. Ref. column. 5. Write each column total. 6. Rule double lines. LESSON 9-3

  25. 5 STARTING A NEW CASH PAYMENTS JOURNAL PAGE page 251 1 2 3 4 1. Write the journal page number. 2. Write the date. 3. Write the words Brought Forward in the Account Title column. 4. Place a check mark in the Post. Ref. column. 5. Record the column totals. LESSON 9-3

  26. 1 5 TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A MONTH page 252 2 3 4 1. Rule a single line. 2. Write the date. 3. Write the word Totals in the Account Title column. 4. Write each column total. 5. Rule double lines. LESSON 9-3

  27. 27. General journal

  28. BUYING SUPPLIES ON ACCOUNT page 255 November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52. 2 4 3 7 1 6 5 1. Write the date. 5. Write the account title and vendor name. 2. Write the account title. 6. Place a diagonal line in the Post. Ref. column. 3. Write the memorandum number. 7. Write the credit amount. 4. Write the debit amount. LESSON 9-4

  29. 27. General journal Purchases return – credit allowed for the purchase price of returned merchandise resulting in a decrease in the customer’s accounts payable Purchases allowance – credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s accounts payable Debit memorandum (DM) – form prepared by the customer showing the price deduction taken by the customer for returns and allowances

  30. DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES page 256 LESSON 9-4

  31. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES page 257 November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. 2 5 1 3 4 6 7 1. Write the date. 4. Write debit memorandum number. 5. Write the amount. 2. Write the account title and vendor name. 6. Write Purchases Returns and Allow. 3. Place a diagonal line in the Post. Ref. column. 7. Write the amount. LESSON 9-4

More Related