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Recording Transactions Using a General Journal. General Journal A journal where all types of entries can be recorded. There are only two amount columns.

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Presentation on theme: "Recording Transactions Using a General Journal. General Journal A journal where all types of entries can be recorded. There are only two amount columns."— Presentation transcript:

1 Recording Transactions Using a General Journal

2 General Journal A journal where all types of entries can be recorded. There are only two amount columns and used when the business cannot attribute the account to any of the special journals.

3 Purchases Returns and Allowances When a customer is unsatisfied with merchandise, they are typically allowed to return part or all of their merchandise. This type of transaction is a Purchases Return. If the product is still usable or of lesser quality the vendor may offer a decrease in the account payable. This type of transaction is a Purchase Allowance A debit memorandum is a document the customer creates to identify the return or allowances.

4 DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES Lesson 18-4, page 471

5 normal balance JOURNALIZING PURCHASES RETURNS AND ALLOWANCES March 8. Returned merchandise to Second Round, Inc. $143.00, covering Purchase Invoice No Debit memorandum No. 78. Accounts Affected Accounts Payable Purchases Returns and Allowances Entered Debit side Credit side Change Increased Classification Liability Contra cost normal balance  normal balance  Bal Second Round, Inc. ACCOUNTS PAYABLE LEDGER GENERAL LEDGER Accounts Payable Purchases Returns and Allowances Lesson 18-1, page 472 (New Bal )

6 2.Write the account title and vendor name in the Account Title column. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES Lesson 18-4, page Place a diagonal line in the Post. Ref. column. 1. Write the date. 4.Write the debit memorandum number. 5.Write the debit amount. 6. Write the account title. 7.Write the credit amount. 3 7

7 normal balance JOURNALIZING BUYING SUPPLIES ON ACCOUNT Because supplies are not merchandise, they would not be recorded in the Purchase Journal, use the General Journal. - March 9. Bought supplies on account from Winter Supplies, $ Memorandum No. 26. Accounts Affected Supplies Accounts Payable Entered Debit side Credit side Change Increased Classification Asset Liability normal balance  normal balance  Winter Supplies ACCOUNTS PAYABLE LEDGER GENERAL LEDGER Supplies Accounts Payable Lesson 18-4, page 473

8 JOURNALIZING BUYING SUPPLIES ON ACCOUNT Lesson 18-4, page Write the account title Write the memorandum number. 1. Write the date. 4.Write the debit amount. 5.Write the account title and vendor name in the Account Title column. 6. Place a diagonal line in the Post. Ref. column. 7.Write the credit amount. 3 7

9 2.Journal Page Number POSTING FROM A GENERAL JOURNAL Lesson 18-4, page Credit 1. Date 4.Account Balance 5.Account Numbers


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