1. Special Journals: Purchases and Cash Payments
Chapter 17 $
Special Journals: Purchases and Cash Payments $
Making Accounting Relevant
Merchandising businesses operate on a cycle of buying and selling goods. $
Select a local business. Discuss the operations of the business: how items are purchased for resale, how the merchandise is displayed and stocked, how sales are conducted, and how the business might pay for this merchandise. $

2. $ $ $ $ Section 1 The Purchases Journal What You’ll Learn Chapter 17
The purpose of the purchases journal.
How to record purchases on account in the purchases journal.
How to post from the purchases journal to the general and accounts payable subsidiary ledger accounts.
How to total, prove, and rule the purchases journal. $ $ $

3. $ $ $ $ Why It’s Important Key Terms Chapter 17 purchases journals
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Why It’s Important
The purchases journal helps businesses keep track of purchases on account. $ $
Key Terms
purchases journals $

4. $ $ $ $ The Purchases Journal Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
The Purchases Journal
A special journal used to record all purchases on account. $ $ $

5. $ $ $ $ Recording the Purchase of Merchandise on Account Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Recording the Purchase of Merchandise on Account
Business Transaction $
On December 14 On Your
Mark received Invoice 7894
from Pro Runner Warehouse
for merchandise purchased
on account, $2,300, terms
2/10, n/30. $
JOURNAL ENTRY $

6. $ $ $ $ Posting to the Accounts Payable Subsidiary Ledger Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Posting to the Accounts Payable Subsidiary Ledger
Each transaction is separately posted to the accounts payable subsidiary ledger. $ $ $

7. $ $ $ $ Posting from the General Debit Column Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Posting from the General Debit Column
Daily postings are made from the General Debit column of the purchases journal to the appropriate accounts in the general ledger. $ $ $

8. $ $ $ $ Totaling, Proving, and Ruling the Purchases Journal Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Totaling, Proving, and Ruling the Purchases Journal
To complete the purchases journal, follow these steps: $
1. Draw a single rule across the three amount columns: Accounts Payable Credit, Purchases Debit, and General Debit.
2. Foot each amount column.
3. Test for the equality of debits and credits. $ $

9. $ $ $ $ Totaling, Proving, and Ruling the Purchases Journal (con’t.)
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Totaling, Proving, and Ruling the Purchases Journal (con’t.)
4. In the Date column, on the line below the single rule, enter the date the journal is being totaled.
5. On the same line, write the word “Totals” in the Creditor’s Account Credited column.
6. Enter the three column totals, in ink, just below the footings.
7. Draw a double rule across the three amount columns. $ $ $

10. $ $ $ $ Check Your Understanding Chapter 17
Section 1 The Sales Journal (con’t.)
Chapter 17 $
Check Your Understanding $
In the purchases journal, the General Debit column total is not posted. Explain why. $ $

11. $ $ $ $ Section 2 The Cash Payments Journal What You’ll Learn
Chapter 17 $
Section 2 The Cash Payments Journal
What You’ll Learn
The purpose of the cash payments journal.
How to record transactions in the cash payments journal.
How to post from the cash payments journal.
How to prepare a schedule of accounts payable.
How to prove cash. $ $ $

12. $ $ $ $ Why It’s Important Key Terms Chapter 17 cash payments journals
Section 2 The Cash Payments Journal (con’t.)
Chapter 17 $
Why It’s Important
Cash is a major asset of a business; therefore, it is essential that a business keep accurate records of both the inflow and the outflow of cash. $ $
Key Terms
cash payments journals
schedule of accounts payable
proving cash $

13. $ $ $ $ The Cash Payments Journal Chapter 17
Section 2 The Cash Payments Journal (con’t.)
Chapter 17 $
The Cash Payments Journal
Used to record all transactions in which cash is paid out or decreased. $ $ $

14. $ $ $ $ Recording the Cash Purchase of an Asset Chapter 17
Section 2 The Cash Payments Journal (con’t.)
Chapter 17 $
Recording the Cash Purchase of an Asset
Business Transaction $
On December 17 On
Your Mark paid $1,500 to
Keystone Insurance
Company for the
premium on a six-month policy, Check 1001. $
JOURNAL ENTRY $

15. $ $ $ $ Recording a Cash Purchase of Merchandise Chapter 17
Section 2 The Cash Payments Journal (con’t.)
Chapter 17 $
Recording a Cash Purchase of Merchandise
Business Transaction $
On December 19 On
Your Mark purchased
merchandise from
Fastlane Athletics for $1,300, Check 1002. $
JOURNAL ENTRY $

16. $ $ $ $ Check Your Understanding Chapter 17 Xxx?
Section 2 The Cash Payments Journal (con’t.)
Chapter 17 $
Check Your Understanding $
Xxx? $ $