Presentation on theme: "Jobs 56-60 Chapter 12. Jobs 56-60 Chapter 12 How to keep a record of amounts owed to creditors How to prepare a schedule of Accounts Payable How to use."— Presentation transcript:
How to keep a record of amounts owed to creditors How to prepare a schedule of Accounts Payable How to use and post a purchases journal How to use and post a cash payments journal How to use and post a purchases returns and allowances journal How to file purchase invoices and credit memos
Creditors People or businesses to whom your company owes money. Compare to Customers Accounts Payable Ledger Group of creditor accounts ▪ Compare to AR Ledger Purchase on Account When your company buys merchandise on credit from another company. Compare to Sold Merchandise on Account Schedule of Accounts Payable A list of what creditors are owed. Compare to Schedule of A/R
Purchases, what do they do to A/P? increase A/P Payments, what do they do to A/P? decrease A/P Credit Memos, what do they do to A/P decrease A/P DR ( -) decrease Checks Credit Memos CR (+) increase Purchases Invoice (NB) Accounts Payable A/P
Purchases Journal Records all Purchases of Merchandise on Account Records all Purchases from creditors by date. Purchases Invoice Purchases Journal AP Ledger CR
1. Copy the date 2. Copy cash or invoice # or Cr. Memo Number 3. Copy the Journal and Page Number 4. Copy the amount 5. Calculate new balance 6. Copy account number ▪ Simply go from the left to the right for steps 1-5. ▪ Step 6 is showing that you completed steps 1-5.
Cash Payments Journal Records all payments of cash to creditors Records all payments to creditors by date. Check Stub Cash Payments Journal AP Ledger DR
Purchased Journal Purchases Invoice—Source Document Records all purchases of merchandise purchased on account Recorded as a CR to A/P Cash Payments Journal Check stub—Source Document Records all payments of cash made to creditors Recorded as DR to A/P
Purchases Journal Records all Purchases of Merchandise on Account Records all Purchases from creditors by date. Purchases Invoice Purchases Journal AP Ledger CR Check Stub Cash Payments Journal AP Ledger DR
Purchases Returns and Allowances Journal Records all Returns of Merchandise to creditors Records all allowances given by creditors. Debit Memo—Source Document Purchases Returns and Allowances Journal AP Ledger DR ▪ Schedule of A/P—Listing of all creditors with a balance due.