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Accounting II Ms. Alltucker.  Explain the purpose of the purchases and cash payments journal  Record transactions in the purchases journal and cash.

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Presentation on theme: "Accounting II Ms. Alltucker.  Explain the purpose of the purchases and cash payments journal  Record transactions in the purchases journal and cash."— Presentation transcript:

1 Accounting II Ms. Alltucker

2  Explain the purpose of the purchases and cash payments journal  Record transactions in the purchases journal and cash payments journal  Record payroll transactions in the cash payments journal  Post from the purchases and cash payments journal  Total, prove, and rule the purchases and cash payments journals  Prepare a schedule of accounts payable  Prove cash  Define accounting terms introduced in this chapter

3  What you will learn:  The purpose of the purchases journal  How to record purchases on account  How to post from purchases journal  How to total, prove, rule the purchase journal  Why it’s important:  The purchases journal helps businesses keep track of purchases on account.

4  Special journal used to record all purchases on account

5 Business Transaction On December 14, On Your Mark received Invoice 7894 from Pro Runner Warehouse for merchandise purchased on account, $2,300, terms 2/10, n/30. JOURNAL ENTRY

6  Enter the date  Enter the invoice number  Enter the creditor’s name  Enter the TOTAL of the invoice in the Accounts Payable Credit column  For purchases of merchandise on account– enter the total amount of the invoice in the purchases debit column  **after the invoice is journalized, it is placed in a tickler file by due date

7  Businesses often purchases supplies and other assets on account  These purchases do not occur often enough to set up special columns in the purchases journal  When this occurs, recorded in the general debit column of the purchases journal

8  On December 15 On your Mark received Invoice #3417 from Champion Store Supply for store equipment bought on account $1200, terms n/30. Dec Chapman Store Supply 1200 Store Equip

9  Enter date invoice was RECEIVED  Enter the invoice number  Ender credits name in the Creditor’s Account Credited column  Enter the TOTAL of the invoice in the A/P credit column  Write the name of the general ledger account being debited in the general account debited column  Store equipment is not merchandise purchased for resale  DO NOT RECORD IN THE PURCHASES DEBIT COLUMN  Enter the total amount of the invoice in the general debit column

10  Each transaction in the purchases journal is a purchase on account  Each transaction is separately posted to the accounts payable subsidiary ledger  Transactions are posted DAILY

11

12  Enter the date of the transaction  Record post reference number P6  In credit column of the subsidiary ledger, enter the amount owed to the creditor  Compute the new account balance  Return to purchases journal and place a check mark in the first post reference column

13  Daily postings

14  Enter the date of transaction  Enter the post reference number, P6  In the debit column of the general ledger account, enter the amount recorded  Compute the new balance  Return to purchases journal and place the general ledger account number in the General Posting reference column

15  Draw a single line across the three amount columns  Accounts payable credit  Purchases debit  General debit  Foot each amount column  Test for the equality of debits and credits Debit ColumnsCredit Columns Purchases $15,400 General 1,450 $16,850 Accounts Payable $16,850

16  In the date column, on the line below the single rule, enter the date the journal is being totaled  On the same line, write totals  Enter the three column totals in ink below the footing  Draw a double line across the three amount columns  LOOK ON PAGE 454 FOR AN EXAMPLE

17  A completed purchase journal is a quick reference tool to review current transactions that affect purchases and accounts payable  Miscellaneous purchases are reflected here too  If a general journal had been used, these transactions would have been mixed in with all of the other transactions

18  After the purchases journal is proven—post the totals of the:  Accounts payable credit column  Purchases debit column  Calculate the new balance  Write the general ledger account number, in parentheses, in the column below the double rule  The total of the general debit column is not posted  Put a check mark below that column Indicates that the total is not to be posted LOOK ON PAGE 456 FOR AN EXAMPLE


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