0. Chapter 17 Special Journals: Purchases and Cash Payments
What You’ll Learn
Explain the purpose of the purchases and cash payments journals.
Record transactions in the purchases and cash payments journal.
Record payroll transactions in the cash payment journal.
Post from the purchases and cash payments journals to the general ledger and the accounts payable subsidiary ledger.
Total, prove, and rule the purchases and cash payments journals.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

1. Chapter 17 Special Journals: Purchases and Cash Payments
What You’ll Learn
Prepare a schedule of accounts payable.
Prove cash.
Define the accounting terms introduced in this chapter.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 17, Section 1 The Purchases Journal
What Do You Think?
What other phrase could be used instead of “credit purchases”?
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

3. The Purchases Journal Main Idea You Will Learn
SECTION 17.1
Main Idea
The purchases journal is used to record credit purchases.
You Will Learn
how to use the purchases journal.
how to post transactions from the purchases journal.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

4. The Purchases Journal Key Terms purchases journal SECTION 17.1
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

5. The Purchases Journal Using the Purchases Journal
SECTION 17.1
Using the Purchases Journal
The purchases journal is a special journal used to record all purchases on account. In this chapter, you will learn how accountants use purchases and cash payments journals to record the purchase of merchandise and other assets.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

6. The Purchases Journal Recording the Purchase of Merchandise on Account
SECTION 17.1
Recording the Purchase of Merchandise on Account
After verifying an invoice, record the purchase in the purchases journal:
Enter the date in the Date column.
Enter the invoice number in the Invoice Number column.
Enter the creditor’s name in the Creditor’s Account Credited column.
Enter the total of the invoice in the Accounts Payable Credit column.
Enter the total amount of the invoice in the Purchases Debit column.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

7. The Purchases Journal Journalizing Other Purchases on Account
SECTION 17.1
Journalizing Other Purchases on Account
Purchases that do not occur often are recorded in the General Debit column of the purchases journal by following these steps:
Enter the date the invoice was received in the Date column.
Enter the invoice number in the Invoice Number column.
Enter the creditor’s name in the Creditor’s Account Credited column.
Enter the total of the invoice in the Accounts Payable Credit column.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

8. The Purchases Journal Journalizing Other Purchases on Account
SECTION 17.1
Journalizing Other Purchases on Account
Enter the name of the general ledger account in the General Account Debited column.
Enter the total amount of the invoice in the General Debit column.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

9. The Purchases Journal Posting from the Purchases Journal
SECTION 17.1
Posting from the Purchases Journal
Special journals save time in recording and posting business transactions. To post to the accounts payable subsidiary ledger:
Enter the transaction date in the Date column of the subsidiary ledger account.
Enter the journal letter and number in the Posting Reference column.
Enter the amount owed to the creditor in the Credit column of the subsidiary ledger account.
Compute the new account balance by adding the amount in the Credit column to the previous balance amount.
Return to the purchases journal and place a check mark in the first Posting Reference column.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

10. The Purchases Journal Posting from the Purchases Journal SECTION 17.1
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

11. The Purchases Journal Posting from the General Debit Column
SECTION 17.1
Posting from the General Debit Column
To post from the General Debit column of the purchases journal, follow these steps:
Enter the transaction date in the general ledger account Date column.
Record the journal letter and page number in the Posting Reference column.
Enter the amount recorded in the General Debit column of the purchases journal in the general ledger Debit column.
Compute and record the new balance in the Debit Balance column.
Place the general ledger account number in the General Posting Reference column of the purchases journal.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

12. The Purchases Journal
SECTION 17.1
Totaling, Proving, and Ruling the Purchases Journal
Complete the purchases journal by following these steps:
Draw a single rule across the three amount columns.
Foot each column.
Test for debit and credit equality.
Enter the date the journal is being totaled in the Date column just below the single rule.
On the same line, write Totals in the Creditor’s Account Credited column.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

13. The Purchases Journal
SECTION 17.1
Totaling, Proving, and Ruling the Purchases Journal
Enter the three column totals in ink, below the footings.
Draw a double rule across the three amount columns.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

14. The Purchases Journal
SECTION 17.1
Totaling, Proving, and Ruling the Purchases Journal
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

15. The Purchases Journal
SECTION 17.1
Posting the Special Column Totals to the General Ledger
After the purchases journal is totaled and ruled, the totals of the Accounts Payable Credit column and the Purchases Debit column are posted to the general ledger accounts and the new balance is calculated and entered in the Balance column. Each account number is written in parentheses below the double-rule in the purchases journal.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

16. The Purchases Journal
SECTION 17.1
Posting the Special Column Totals to the General Ledger
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

17. The Purchases Journal Key Terms Review purchases journal
SECTION 17.1
Key Terms Review
purchases journal
A special journal used to record all transactions in which items are bought on account.
Glencoe Accounting Unit 4 Chapter 17 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.