Presentation on theme: "Chapter 9, Section 4. Used for any transaction that cannot be recorded in a special journal. Examples: Buying supplies/equipment on account Purchases."— Presentation transcript:
Used for any transaction that cannot be recorded in a special journal. Examples: Buying supplies/equipment on account Purchases returns and allowances
Invoice for buying supplies on account is similar to invoice when buying merchandise on account. When buying supplies, a memo is attached to the invoice to explain what was purchased.
1 2 3 4 5 6 November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52. 1.Write the date.5.Write the credit account title and vendor name. 2.Write the debit account title. 6.Place a diagonal line in the Post. Ref. column. 3.Write the memorandum number. 7.Write the credit amount. 4.Write the debit amount. 7
Purchases Return Credit allowed for the purchase price of returned merchandise Purchases Allowance Credit allowed for part of the purchase price of merchandise that is not returned Classified as a contra-cost account Contra account to Purchases Purchases Returns And Allowances Credit Normal Balance
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances Is called a debit memorandum because the Accounts Payable account is debited when there is a return or an allowance.
4. Write debit memorandum number. November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. 1 2 3 4 5 6 1.Write the date. 5. Write the debit amount. 2.Write the account title and vendor name. 6. Write Purchases Returns and Allow. 3.Place a diagonal line in the Post. Ref. column. 7. Write the credit amount. 7
Work Together 9-4 (Text pg. 258) On Your Own 9-4 (Text pg. 258) Application 9-5 (Text pg. 262)