1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-2 Journalizing and Posting Purchases and Purchases Returns

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Objectives Identify accounting concepts and practices related to departmental purchases. Journalize and post departmental purchases and purchases returns.

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Departmental Accounting System An accounting system showing accounting information for two or more departments is called a departmental accounting system. Gross profit is calculated for each department General ledger includes a number of separate accounts A business that purchases and sells goods is called a merchandising business.

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Merchandising Business Merchandising businesses may have two types of equipment 1)Equipment purchased for sale to customers 2)Equipment used in the operation of the business

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Departmental Accounting System Purchase invoices are used as the source document for ALL purchases on account. All departmental purchases of merchandise on account are recorded in a purchases journal.

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-2 June 1. Purchased video equipment on account from Western Digital Systems, $845.00. Purchase Invoice No. 336. JOURNALIZING PURCHASES ON ACCOUNT 1.Write approval date. 4.Write invoice amount. 3.Record invoice number. 2.Write vendor name. page 13 2 2 3 3 4 44 1 1

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 1-2 1.Write the date. 5.Write vendor number. 4.Calculate new account balance. 3.Record the credit amount. 2.Write journal page number. POSTING FROM A PURCHASES JOURNAL page 14 4 5 3 1 2

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-2 4.Calculate new account balance. 3.Write column total. 2.Write journal page number. POSTING THE TOTALS OF A PURCHASES JOURNAL page 15 1.Write the date. 5.Write account number. 3 4 1 2 5

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 1-2 2.Enter accounts to be debited. 3.Record debit memo number. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES page 16 6 1 1 2 2 3 3 4 75 1.Write the date. 4.Draw diagonal line. 5.Write debit amount. 7.Write credit amount. 6.Enter account to be credited.

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 1-2 TERMS REVIEW departmental accounting system merchandising business posting debit memorandum contra account page 17