1. Journalizing Cash Payments Using a Cash Payments Journal
LESSON 9-2
Journalizing Cash Payments Using a Cash Payments Journal
Original created by M.C. McLaughlin, Thomson/South-Western
Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School

2. CASH PAYMENTS JOURNAL
page 242
A special journal used to record only cash payment transactions is called a cash payments journal
The cash payments journal contains columns for general journal transactions, accounts payable, purchases discount and cash
A journal amount column that is not headed with an account title is called a general amount column
LESSON 9-2

3. CASH PAYMENT OF AN EXPENSE
page 243
November 2. Paid cash for advertising, $ Check No. 292. 1 2 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

4. BUYING SUPPLIES FOR CASH
LESSON 9-2
4/17/2017
BUYING SUPPLIES FOR CASH
page 243
November 5. Paid cash for office supplies, $ Check No. 293. 1 2 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

5. CASH PAYMENTS FOR PURCHASES
The retail price listed in a catalog or on an Internet site is called a list price
A reduction in the list price granted to customers is called a trade discount.
When a trade discount is granted, the seller’s invoice shows the actual amount charged (less the trade discount). The amount charged is the invoice amount
LESSON 9-2

6. CASH PAYMENTS FOR PURCHASES
page 244
November 7. Purchased merchandise for cash, $ (Original list price $1500 less a 60% trade discount.) Check No. 301. 2 1 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

7. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS
A deduction that a vendor allows on the invoice amount to encourage prompt payment is called a cash discount
A cash discount on purchases taken by a customer is called a purchases discount
An account that reduces a related account on a financial statement is called a contra account
Purchases discount is a contra account to Purchases
The normal balance for contra accounts are opposite the normal balances of their related accounts
LESSON 9-2

8. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS
A cash discount is stated as a percentage deducted from the nvoice amount
2/10, n/30 – means 2% of the invoice amount may be deducted if the invoice is paid within 10 days of the invoice
Purchases discounts are recorded in a general ledger account titled Purchases Discount
LESSON 9-2

9. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS
page 245
November 8. Paid cash on account to Gulf Craft Supply, $488.04, covering Purchase Invoice No. 82 for $498.00, less 2% discount, $9.96. Check No. 302. 5 6 1 2 4 3
1. Write the date.
2. Write the account title of the vendor.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
6. Write the credit amount.
LESSON 9-2

10. CASH PAYMENTS ON ACCOUNT WITHOUT PURCHASES DISCOUNTS
page 246
November 13. Paid cash on account to American Paint, $2,650.00, covering Purchase Invoice No. 77. Check No. 303. 1 2 4 5 3
1. Write the date.
2. Write the vendor account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

11. TERMS REVIEW cash payments journal cash discount purchases discount
page 247
cash payments journal
cash discount
purchases discount
general amount column
list price
trade discount
contra account
LESSON 9-2