1. LESSON 9-1 Journalizing Purchases Using a Purchases Journal
4/14/2017
LESSON 9-1
Journalizing Purchases Using a Purchases Journal

2. New Vocabulary Merchandise: Goods that a business purchases to sell
Merchandising business: A business that purchases and sells goods
Retail business: A merchandising business that sells to those who use or consume the goods
Wholesale merchandising business: A business that buys and resells merchandise to retail merchandising businesses
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3. New Vocabulary
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
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4. New Vocabulary
Special journal: A journal used to record only one kind of transaction
Cost of merchandise: The 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 are others assets are bought
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5. New Vocabulary
Purchase on account: A transaction in which the merchandise purchased is to be paid for later
Purchases Journal: A special journal used to record only purchases of merchandise on account
Special amount column: a Journal amount column headed with an account title
Purchase invoice: An invoice used as a source document for recording a purchase on account transaction
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6. PURCHASING MERCHANDISE
page 236
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7. PURCHASES ON ACCOUNT
page 236
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8. PURCHASES JOURNAL
page 237
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9. PURCHASE INVOICE
page 238 1 4 2 3
1. Stamp the date received and purchase invoice number.
3. Initials of the person who checked the invoice.
2. Place a check mark by each amount.
4. Review the vendor’s terms.
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10. PURCHASING MERCHANDISE ON ACCOUNT
page 239
November 2. Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No. 83. 2 1 3 4
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11. TOTALING AND RULING A PURCHASES JOURNAL
page 240 1 4 5 3 2 6
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12. Audit Your Understanding
What kinds of transactions are recorded in a purchases journal?
Purchases of merchandise on account
For what are special amount columns in a journal used?
Frequently occurring transactions
Why are there two account titles in the amount column of the purchases journal?
Because the same two accounts are always affected by purchase on account transactions
What is the advantage of having special amount columns in a journal?
Time is saved because it eliminates writing the account title
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13. Work Together & OYO
P. 241
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14. Journalizing Cash Payments Using a Cash Payments Journal
LESSON 9-2
Journalizing Cash Payments Using a Cash Payments Journal

15. CASH PAYMENTS JOURNAL
page 242
Cash Payments Journal: A special journal used to record only cash payment transactions
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16. CASH PAYMENT OF AN EXPENSE
page 243
November 2. Paid cash for advertising, $ Check No. 292. 1 2 3 4 5
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17. BUYING SUPPLIES FOR CASH
LESSON 9-1
4/14/2017
BUYING SUPPLIES FOR CASH
page 243
November 5. Paid cash for office supplies, $ Check No. 293.
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18. CASH PAYMENTS FOR PURCHASES
page 244
November 7. Purchased merchandise for cash, $ Check No. 301.
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19. New Vocabulary
Cash Discount: A deduction that a vendor allows on the invoice amount to encourage prompt payment
Purchases Discount: A cash discount on purchases taken for paying early
General amount column: A journal amount column not headed with an account title
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20. New Vocabulary
List price: The retail price listed in the catalog or on an Internet site
Trade discount: A reduction in the list price granted to customers
Contra account: An account that reduces a related account on a financial statement
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21. 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.
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22. CASH PAYMENTS ON ACCOUNT WITH NO PURCHASES DISCOUNTS
page 246
November 13. Paid cash on account to American Paint, $2,650.00, covering Purchase Invoice No. 77. Check No. 303.
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23. Audit Your Understanding
Why would a vendor offer a cash discount to a customer?
To encourage early payment
What is recorded in the general amount columns of the cash payments journal?
Cash payment transactions that do not occur often
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24. Audit Your Understanding
What is the difference between purchasing merchandise and buying supplies?
A business purchases merchandise to sell but buys supplies for use in the business. Supplies are not intended for sale.
What is meant by the terms of sale 2/10, n/30?
Two ten means that 2% of the invoice amount may be deducted if the invoice is paid within 10 days of the invoice date. Net 30 means the total invoiced amount must be paid within 30 days.
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25. Work Together & OYO
P. 247
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26. LESSON 9-1 Performing Additional Cash Payments Journal Operations
4/14/2017
LESSON 9-3
Performing Additional Cash Payments Journal Operations

27. New Vocabulary
Cash short: A petty cash on hand amount that is less than the recorded amount
Cash over: A petty cash on hand amount that is more than a recorded amount
Cash Short and Over Account
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28. PETTY CASH REPORT 1. Write the date and custodian name. 1
LESSON 9-1
4/14/2017
PETTY CASH REPORT
page 248
1. Write the date and custodian name. 1
2. Write the fund total.
3. Summarize petty cash payments. 2 3
4. Calculate and write the total payments. 4
5. Calculate and write the recorded amount on hand. 5 6 7 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.
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29. REPLENISHING A PETTY CASH FUND
LESSON 9-1
4/14/2017
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
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30. TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARD
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31. STARTING A NEW CASH PAYMENTS JOURNAL PAGE
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32. LESSON 9-1
TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A MONTH
4/14/2017
page 252
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33. Audit Your Understanding
When journalizing a cash payment to replenish petty cash, what is entered in the account title column of the cash payments journal?
The titles of the account for which the petty cash fund was used. Example: Supplies, Misc. Expense, etc.
What is the usual balance of the account cash short and over?
The balance is usually a debit because the petty cash fund is more likely to be short than over
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34. Work Together & OYO
P. 253
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35. LESSON 9-1 Journalizing Other Transactions Using a General Journal
4/14/2017
LESSON 9-4
Journalizing Other Transactions Using a General Journal

36. New Vocabulary
Purchases returned: 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: A form prepared by the customer showing the price deduction taken by the customer for returns and allowances
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37. MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT
page 254
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38. BUYING SUPPLIES ON ACCOUNT
LESSON 9-1
4/14/2017
BUYING SUPPLIES ON ACCOUNT
page 255
November 6. Bought store supplies on account from Gulf Craft Supply, $ Memorandum No. 52.
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39. DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES
page 256
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40. 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.
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41. Audit Your Understanding
What journal is used to record transactions that cannot be recorded in special journals?
General journal
Why is a memorandum used as the source document when supplies are bought on account?
To specify that the invoice is for store supplies and not for purchases, ensuring that no mistake is made when journalizing the transaction.
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42. Work Together & OYO
P. 258
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43. Today’s Chuckle
Mr. and Mrs. Fenton are retired, and Mrs. Fenton insists her husband go with her to Wal-Mart. He gets so bored with all the shopping trips. He prefers to get in and get out, but Mrs. Fenton loves to browse. One day Mrs. Fenton gets this letter from Wal-Mart:
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44. Dear Mrs. Fenton, Over the past six months, your husband has been causing quite a commotion in our store. We cannot tolerate this behavior and may ban both of you from our stores. We have documented all incidents on our video surveillance equipment. The complaints against Mr. Fenton are listed below:
Things Mr. Bill Fenton has done while his spouse was shopping in Wal-Mart:
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45. June 15: Took 24 boxes of condoms and randomly put them in people's cart when they weren't looking.
July 2: Set all the alarm clocks in House wares to go off at 5-minute intervals.
July 7: Made a trail of tomato juice on the floor leading to the ladies rest rooms.
July 19: Walked up to an employee and told her, in an official tone, 'Code 3' in house wares and watched what happened.
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46. September 14: Moved a 'CAUTION - WET FLOOR' sign to a carpeted area.
August 4: Went to the Service Desk and asked to put a bag of M&M's on layaway.
September 14: Moved a 'CAUTION - WET FLOOR' sign to a carpeted area.
September 15: Set up a tent in the camping department and told other shoppers he'd invite them in if they'll bring pillows from the bedding department.
September 23: When a clerk asks if they can help him, he begins to cry and asks, 'Why can't you people just leave me alone?'
October 4: Looked right into the security camera; used it as a mirror, and picked his nose.
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47. November 10: While handling guns in the hunting department, asked the clerk if he knows where the antidepressants are.
December 3: Darted around the store suspiciously loudly humming the "Mission Impossible" theme.
December 6: In the auto department, practiced his "Madonna look" using different size funnels.
December 18: Hid in a clothing rack and when people browse through, yelled "PICK ME!" "PICK ME!"
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48. December 21: When an announcement came over the loud speaker, he assumes the fetal position and screams "NO! NO! It's those voices again!!!!"
And last, but not least—December 23: Went into a fitting room, shut the door, waited awhile, and then yelled very loudly, "There is no toilet paper in here!"
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49. The End
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