Presentation on theme: "Chapter 9 Journalizing Purchases Using a Purchases Journal"— Presentation transcript:
1 Chapter 9 Journalizing Purchases Using a Purchases Journal
2 9-1 JOURNALIZING PURCHASES USING A PURCHASES JOURNAL Chapter 99-1 JOURNALIZING PURCHASES USING A PURCHASES JOURNALA business with the legal rights of a person and which many persons own is called a corporation.It can own property, incur liabilities, enter into contracts in its own name, and sell ownership in itself.Each unit of ownership in a corporation is called a share of stock.An owner of one or more shares of a corporation is called a shareholder.Total shares of ownership in a corporation are called capital stock.Biggest difference between proprietorship and corporation:CAPITAL ACCOUNT-Proprietorship only has one capital and drawing account.-Corporation has separate capital accounts for stock issued and for the earnings kept in the business.
3 Merchandising Business purchases and sell goods. Chapter 9Merchandising Business purchases and sell goods.Retail - Sells to consumersWholesale - Sells to retailersSpecial Journal:A journal used to record only ONE type of transaction.Five Special Journals used:Purchases journal - ALL purchases of merchandise on account.Cash payments journal - ALL cash payments.Sales journal - ALL sales of merchandise on account.Cash receipts journal - ALL cash receipts.5. General journal - ALL other transactions.
4 PURCHASING MERCHANDISE Chapter 9PURCHASING MERCHANDISECost of Merchandise Sold:The price a business pays for goods it purchases to sell.Markup: The amount added to the cost of merchandise.Purchases is classified as acost account.Has a normal debit balance.It is a temporary account.Only used for merchandise purchased - NOT SUPPLIES
5 Chapter 9PURCHASES ON ACCOUNTpage 236A transaction in which merchandise purchased is to be paidfor later is called a purchase on account.To avoid a bulky general ledger, the total amount owed to vendors is summarized in a single general ledger account Accounts Payable.
6 Chapter 9PURCHASES JOURNALpage 237A purchases journal is a special journal used ONLY to record purchases of merchandise on account.Hobby Shack uses a special amount column because all purchaseon account transactions involve purchases debit and acct. pay credit.
7 PURCHASE INVOICE A source document for purchase on accounts Chapter 9PURCHASE INVOICE A source document for purchase on accountspage 23814231. 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.
8 PURCHASING MERCHANDISE ON ACCOUNT Chapter 9PURCHASING MERCHANDISE ON ACCOUNTpage 239November 2. Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No. 83.21341. Write the date.2. Write the vendor name.3. Write the purchase invoice number.4. Write the amount of the invoice.
9 TOTALING AND RULING A PURCHASES JOURNAL Chapter 9TOTALING AND RULING A PURCHASES JOURNALpage 2401453261. 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.
10 9-2 JOURNALIZING CASH PAYMENTS USING A CASH PAYMENTS JOURNAL Chapter 99-2 JOURNALIZING CASH PAYMENTS USING A CASH PAYMENTS JOURNALpage 242A special journal used to record ONLY cash payment transactions.
11 CASH PAYMENT OF AN EXPENSE Chapter 9CASH PAYMENT OF AN EXPENSEpage 243November 2. Paid cash for advertising, $ Check No. 292.123451. Write the date.2. Write the account title.3. Write the check number.4. Write the debit amount.5. Write the credit amount.
12 BUYING SUPPLIES FOR CASH Chapter 9BUYING SUPPLIES FOR CASHpage 243November 5. Paid cash for office supplies, $ Check No. 293.123451. Write the date.2. Write the account title.3. Write the check number.4. Write the debit amount.5. Write the credit amount.
13 CASH PAYMENTS FOR PURCHASES Chapter 9CASH PAYMENTS FOR PURCHASESpage 244November 7. Purchased merchandise for cash, $ Check No. 301.213451. Write the date.2. Write the account title.3. Write the check number.4. Write the debit amount.5. Write the credit amount.
14 CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS Chapter 9CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTSpage 245November 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. 302.5612431. 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.
15 9-3 PERFORMING ADDITIONAL CASH PAYMENTS JOURNAL OPERATIONS Chapter 99-3 PERFORMING ADDITIONAL CASH PAYMENTS JOURNAL OPERATIONSpage 2481PETTY CASH REPORT1. Write the date and custodian name.22. Write the fund total.33. Summarize petty cash payments.44. Calculate and write the total payments.565. Calculate and write the recorded amount on hand.786. 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.
16 REPLENISHING A PETTY CASH FUND Chapter 9REPLENISHING A PETTY CASH FUNDpage 2491. Date2. Account titles3. Check number4. Expense amounts5. Cash short as a debit; cash over as a credit6. Total cash payment456132
17 Chapter 9TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARDpage 2501423561. 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.
18 STARTING A NEW CASH PAYMENTS JOURNAL PAGE Chapter 9STARTING A NEW CASH PAYMENTS JOURNAL PAGEpage 251152341. 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.
19 Chapter 9TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A MONTHpage 252123451. 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.
20 9-4 JOURNALIZING OTHER TRANSCATIONS USING A GENERAL JOURNAL Chapter 99-4 JOURNALIZING OTHER TRANSCATIONS USING A GENERAL JOURNALpage 254Memorandum for buying supplies on account.
21 BUYING SUPPLIES ON ACCOUNT Chapter 9BUYING SUPPLIES ON ACCOUNTpage 255November 6. Bought store supplies on account from Gulf Craft Supply, $ Memorandum No. 52.24371651. 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.4. Write the debit amount.7. Write the credit amount.
22 DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES Chapter 9DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCESpage 256Purchases Return- Credit allowed for the purchase price of returnedmerchandise decreasing customer’s accounts payable.Purchases Allowance - Credit allowed for part of the purchase priceof merchandise that is notreturned, decreasingcustomer’s acct. pay.Debit Memo - sourcedocument used to showdecrease in vendor acct.
23 JOURNALIZING PURCHASES RETURNS AND ALLOWANCES Chapter 9JOURNALIZING PURCHASES RETURNS AND ALLOWANCESpage 257November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.25134671. Write the date.4. Write debit memorandum number.2. Write the account title and vendor name.5. Write the amount.6. Write Purchases Returns and Allow.3. Place a diagonal line in the Post. Ref. column.7. Write the amount.