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Accounting I Chapter 10 - Journalizing Purchases & Cash Payments.

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Presentation on theme: "Accounting I Chapter 10 - Journalizing Purchases & Cash Payments."— Presentation transcript:

1 Accounting I Chapter 10 - Journalizing Purchases & Cash Payments

2 T ERMS REVIEW partnership partner merchandising business retail merchandising business merchandise Lesson 10-1, page 232 wholesale merchandising business cost of merchandise markup vendor

3 T ERMS REVIEW Partnership A business in which two or more persons combine their assets and skills. Lesson 10-1, page 226

4 T ERMS REVIEW Partner Each member of a partnership. Lesson 10-1, page 226

5 T ERMS REVIEW Merchandising Business A business that purchases and sells goods. Lesson 10-1, page 228

6 T ERMS REVIEW Retail Merchandising Business A merchandising business that sells to those who use or consume the goods. Lesson 10-1, page 228

7 T ERMS REVIEW Merchandise Goods that a merchandising business purchases to sell. Lesson 10-1, page 228

8 T ERMS REVIEW Wholesale Merchandising Business A business that buys and resells merchandise to retail merchandising businesses. Lesson 10-1, page 228

9 T ERMS REVIEW Cost of Merchandise The price a business pays for goods it purchases to sell. Lesson 10-1, page 230

10 T ERMS REVIEW Markup The amount added to the cost of merchandise to establish the selling price. Lesson 10-1, page 230

11 T ERMS REVIEW Vendor A business from which merchandise is purchased or supplies or other assets are bought. Lesson 10-1, page 230

12 EXPANDED JOURNAL Lesson 10-1, page 229

13 PURCHASING MERCHANDISE FOR CASH November 1. Purchased merchandise for cash, $ Check No Which accounts are affected? Purchases Cash 4.How is each amount entered in the accounts? Costs increase on the debit side. Assets decrease on the credit side. 3.How is each classification changed? Costs are increased. Assets are decreased. 2.How is each account classified? Purchases is a cost account. Cash is an asset account. Cash Purchases Debit Normal Balance Debit Normal Balance   Lesson 10-1, page 231

14 2.Place a check mark in the Account Title column to show that no account title is needed. PURCHASING MERCHANDISE FOR CASH Write the check number. 1. Write the date. 4.Place a check mark in the Post. Ref. column to show that amounts are not to be posted individually. 5. Write the debit amount. 6. Write the credit amount. 6 Lesson 10-1, page 231

15 Work Together & On Your Own – Page 232

16 T ERMS REVIEW purchase invoice terms of sale Lesson 10-2, page 237

17 T ERMS REVIEW Purchase Invoice An invoice used as a source document for recording a purchase on account transaction. Lesson 10-2, page 233

18 T ERMS REVIEW Terms of Sale An agreement between a buyer and a seller about payment for merchandise. Lesson 10-2, page 233

19 PURCHASE INVOICE Initials of person who checked invoice. 1. Stamp date received and purchase invoice number. 4.Review vendor’s terms of sale. 2.Place a check mark by each amount. Lesson 10-2, page 233

20 PURCHASING MERCHANDISE ON ACCOUNT November 2. Purchased merchandise on account from Crown Ltd., $2, Purchase Invoice No Which accounts are affected? Purchases Accounts Payable 4.How is each amount entered in the accounts? Costs increase on the debit side. Liabilities increase on the credit side. 3.How is each classification changed? Costs are increased. Liabilities are increased. 2.How is each account classified? Purchases is a cost account. Accounts Payable is a liability account. Debit Normal Balance Credit Normal Balance  2,  Lesson 10-2, page 234 Accounts Payable Purchases

21 PURCHASING MERCHANDISE ON ACCOUNT Write the purchase invoice number in the Doc. No. column. 1. Write the date. 4.Write the credit amount. 2.Write the vendor name in the Account Title column. 5.Write the debit amount. Lesson 10-2, page 234

22 BUYING SUPPLIES FOR CASH Lesson 10-2, page Write the check number. 1. Write the date. 4.Write the debit amount. 2.Write the account title. 5.Write the credit amount.

23 2.Write the account title. BUYING SUPPLIES ON ACCOUNT Write the memorandum number. 1. Write the date. 4.Write the debit amount. 5.Write the vendor name. 6.Write the credit amount. 6 Lesson 10-2, page 236

24 Work Together & On Your Own – Page 237

25 CASH PAYMENT ON ACCOUNT Write the check number. 1. Write the date. 4.Write the debit amount. 2.Write the vendor name. 5.Write the credit amount. Lesson 10-3, page 238

26 CASH PAYMENT OF AN EXPENSE Write the check number. 1. Write the date. 4.Write the debit amount. 2.Write the vendor name account title. 5.Write the credit amount. Lesson 10-3, page 239

27 Supplies—Store Cash Miscellaneous Expense Advertising ExpenseSupplies—Office CASH PAYMENT TO REPLENISH PETTY CASH November 9. Paid cash to replenish the petty cash fund, $205.00: office supplies, $35.00; store supplies, $47.00; advertising, $92.00; miscellaneous, $ Check No Accounts Affected Supplies—Office Supplies—Store Advertising Expense Miscellaneous Expense Cash Entered Debit side Credit side Change Increased Decreased Lesson 10-3, page 240 Classification Asset Expense Asset normal balance normal balance normal balance normal balance normal balance    

28 CASH PAYMENT TO REPLENISH PETTY CASH Write the check number. 1. Write the date. 4.Write the debit amounts. 2.Write the titles of accounts for which petty cash was used. 5.Write the credit amount. Lesson 10-3, page 240

29 CashMichelle Wu, Drawing CASH WITHDRAWALS BY PARTNERS November 10. Michelle Wu, partner, withdrew cash for personal use, $1, Check No Accounts Affected Michelle Wu, Drawing Cash Entered Debit side Credit side Change Increased Decreased Lesson 10-3, page 241 Classification Drawing Asset normal balance 1, normal balance 1,  

30 CASH WITHDRAWALS BY PARTNERS Write the check number. 1. Write the date. 4.Write the debit amount. 2.Write the account title. 5.Write the credit amount. Lesson 10-3, page 241

31 PurchasesKarl Koehn, Drawing MERCHANDISE WITHDRAWALS BY PARTNERS November 12. Karl Koehn, partner, withdrew merchandise for personal use, $ Memorandum No. 53. Accounts Affected Karl Koehn, Drawing Purchases Entered Debit side Credit side Change Increased Decreased Lesson 10-3, page 242 Classification Drawing Cost normal balance normal balance  

32 MERCHANDISE WITHDRAWALS BY PARTNERS Write the memorandum number. 1. Write the date. 4.Write the debit amount. 2.Write the account title Karl Koehn, Drawing. 5.Write the account title Purchases. 6.Write the credit amount. 6 Lesson 10-3, page 242

33 Work Together & On Your Own – Page 243


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