Recording Transactions Using a General Journal

General Journal General Journal A journal where all types of entries can be recorded. There are only two amount columns and used when the business cannot attribute the account to any of the special journals.

Purchases Returns and Allowances When a customer is unsatisfied with merchandise, they are typically allowed to return part or all of their merchandise. This type of transaction is a Purchases Return. If the product is still usable or of lesser quality the vendor may offer a decrease in the account payable. This type of transaction is a Purchase Allowance A debit memorandum is a document the customer creates to identify the return or allowances.

DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES Lesson 18-4, page 471

JOURNALIZING PURCHASES RETURNS AND ALLOWANCES March 8. Returned merchandise to Second Round, Inc. $143.00, covering Purchase Invoice No. 230. Debit memorandum No. 78. Accounts Affected Accounts Payable Purchases Returns and Allowances Classification Liability Contra cost Change Increased Entered Debit side Credit side Bal. 820.00 Second Round, Inc. ACCOUNTS PAYABLE LEDGER GENERAL LEDGER Accounts Payable Purchases Returns and Allowances normal balance normal balance  143.00 143.00 (New Bal. 677.00) normal balance  143.00 Lesson 18-1, page 472

JOURNALIZING PURCHASES RETURNS AND ALLOWANCES 1 2 3 4 5 6 7 1. Write the date. 2. Write the account title and vendor name in the Account Title column. 3. Place a diagonal line in the Post. Ref. column. 4. Write the debit memorandum number. 5. Write the debit amount. 6. Write the account title. 7. Write the credit amount. Lesson 18-4, page 472

JOURNALIZING BUYING SUPPLIES ON ACCOUNT Because supplies are not merchandise, they would not be recorded in the Purchase Journal, use the General Journal. - March 9. Bought supplies on account from Winter Supplies, $316.00. Memorandum No. 26. Accounts Affected Supplies Accounts Payable Classification Asset Liability Change Increased Entered Debit side Credit side GENERAL LEDGER Supplies Accounts Payable Winter Supplies ACCOUNTS PAYABLE LEDGER normal balance normal balance  316.00  316.00 normal balance  316.00 Lesson 18-4, page 473

JOURNALIZING BUYING SUPPLIES ON ACCOUNT 4 2 3 1 6 5 7 1. Write the date. 2. Write the account title. 3 3. Write the memorandum number. 4. Write the debit amount. 5. Write the account title and vendor name in the Account Title column. 6. Place a diagonal line in the Post. Ref. column. 7. Write the credit amount. Lesson 18-4, page 473

POSTING FROM A GENERAL JOURNAL 2 1. Date 1 3 5 2. Journal Page Number 3. Credit 4. Account Balance 5. Account Numbers 4 Lesson 18-4, page 474