1. LESSON 9-4 Journalizing Other Transactions Using a General Journal
4/23/2017
LESSON 9-4
Journalizing Other Transactions Using a General Journal

2. Other Transactions Supplies purchased on Account (memorandum)
What two accounts?
Accounts Payable and Supplies
Which Journal will you use?
Purchases
Purchases (merchandise) on Account
Cash Payments
Payments made with Cash
Cash Receipts
Received payment on account, sales for cash
Sales Journal
Sales on Account
General Journal

3. Using the General Journal
Use the General Journal to record transactions that do not fit in other journals.
Purchasing Supplies on Account (items used in operation of the business and not for resell)
Returning merchandise that you can’t sell because it is damaged or not usable.

4. MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT

5. BUYING SUPPLIES ON ACCOUNT
LESSON 9-4
4/23/2017
BUYING SUPPLIES ON ACCOUNT
November 6. Bought store supplies on account from Gulf Craft Supply, $ Memorandum No. 52.
What two accounts are impacted?
Supplies Store
$210
Accounts Pay/Golf Craft Supply
$210

6. BUYING SUPPLIES ON ACCOUNT
LESSON 9-4
BUYING SUPPLIES ON ACCOUNT
4/23/2017
November 6. Bought store supplies on account from Gulf Craft Supply, $ Memorandum No. 52.
General Journal
Page:
Date
Account Title
Doc No
Post. Ref
General
Debit
Credit
Two Ledgers for Accounts Payables
One is Accounts Payable – One is Gulf Craft Subsidiary Ledger
Enter credit account title / vendor
Accounts Payable – Gulf Craft Supply = 1 ledger account
Accounts Payable / Gulf Craft Supply = 2 ledger accounts
Place a diagonal line in the Post. Ref. column (two ledger accounts impacted)

7. Purchase Returns & Allowance

8. PURCHASES RETURNS AND ALLOWANCES
Two Types of Returns:
Purchase Returns:
Returned the entire product (damaged and unusable) – full refund
Purchases allowance: credit allowed for part of the purchase price of merchandise that is not returned
Decrease accounts payable (damaged but still usable)
Both are recorded in the Purchases Returns & Allowance Account.

9. PURCHASES RETURNS AND ALLOWANCES
New Account:
Purchases Returns and Allowance: credit allowed for the purchase price of returned merchandise to the vendor
Contra Account to Purchases (reduces a related account)
Returns decrease amount you owe (accts payable debit)
Has opposite NB balance from the Parent or related account
Has a Normal Balance of a Credit

10. PURCHASES RETURNS Purchase Returns and Allowance
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
Purchase Returns and Allowance
Accounts Payable/Crown Distributing

11. PURCHASES RETURNS AND ALLOWANCES
New Source Document:
Debit memorandum: form prepared showing the price deduction taken by the business customer for returns and allowances
DM45
Used for Returns only
Note: returning to the vendor……
Use the General Journal for returns
not a purchase, sale, receipt or payment

12. PURCHASES RETURNS AND ALLOWANCES
Reminders When Returning merchandise we purchased
Debit Memorandum = source document DM18
General Journal = Journal
Entered in Purchases and Returns account
Decreases the amount you owe - Accounts payable
Increases the Purchases & Returns Allowance Account
Contra account to Purchases
Normal Balance = Credit (increases on credit, decrease on debit)

13. DEBIT MEMORANDUM

14. PURCHASES RETURNS Purchase Returns and Allowance 252.00
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
Purchase Returns and Allowance
252.00
Accounts Payable/Crown Distributing
252.00

15. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
General Journal
Page:
Date
Account Title
Doc No
Post. Ref
General
Debit
Credit
Nov 06
Supplies-Store
M52 2 1 00
Accounts Payable/Golf Craft Supply
1. Enter account title & vendor
3. Enter debit memorandum number.
2. Diagonal line in the Post. Ref. column (two ledger accounts)
4. Enter debit and credit amount.

16. TERMS REVIEW
purchases return
purchases allowance
debit memorandum

17. Practice
WTG 9-4

18. Lesson 9-4 PowerPoint Work Together
General Journal
Page:
Date
Account Title
Doc No
Post. Ref
General
Debit
Credit