1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-3 Journalizing and Posting Cash Payments

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 1-3 June 1. Paid cash on account to AudioMax, $514.50, covering Purchase Invoice No. 331 for surround sound audio equipment for $525.00, less 2% discount, $10.50. Check No. 315. 1.Write the date.4.Write the debit amount. 3.Record the check number. 2.Enter vendor name. 6.Enter the credit amount. 5.Record the discount amount. JOURNALIZING A PURCHASES DISCOUNT page 19 234561

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 1-3 June 2. Paid cash on account to Western Digital Systems, $781.55, covering Purchase Invoice No. 336 for video equipment for $845.00, less Debit Memorandum No. 22 for $47.50, and less 2% discount, $15.95. Check No. 316. Amount owed on invoice: Original Purchase Invoice Amount (P336) Purchase Invoice Amount After Return Purchases Return (DM22) –= $845.00 – 47.50 = $797.50 × 2% = $15.95 – $781.55 = $797.50 Purchases discount: Purchase Invoice Amount After Return Purchases Discount Purchases Discount Rate ×= Amount due after purchases discount: Purchase Invoice Amount After Return Total Amount Due Purchases Discount –= TAKING A DISCOUNT AFTER A PURCHASE RETURN page 20

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 1-3 June 2. Paid cash for administrative supplies, $136.00. Check No. 317. RECORDING ENTRIES IN A CASH PAYMENTS JOURNAL page 21 1.Write the date. 2.Enter the account title. 3.Record the check number. 4.Write the debit amount. 5.Enter the credit amount. 12345

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-3 June 30. Paid cash to replenish the petty cash fund, $402.00: administrative supplies, $300.00; advertising expense—video, $56.00; miscellaneous expense, $46.00. Check No. 350. 1.Write the date. 3.Record the check number. 2.Enter account titles. 4.Write the debit amounts. 5.Enter the credit amount. CASH PAYMENT TO REPLENISH PETTY CASH page 22 1 45 2 3

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-3 POSTING FROM A CASH PAYMENTS JOURNAL page 23

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 1-3 TERMS REVIEW cash discount purchases discount petty cash page 24

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 1-3 Audit Your Understanding 1.What general ledger accounts affected, and how, by a cash payment on account for video equipment that includes a purchase discount? SLIDE 8 ANSWER Accounts Payable is debited; Cash and Purchases Discount-Video are credited. Lesson 1-1 page 11

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 1-3 Audit Your Understanding 2.Where are cash payments affecting accounts that are not listed in the column headings recorded? SLIDE 9 ANSWER In the General Debit and Credit columns of the cash payments journal. Lesson 1-1 page 11

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 1-3 Audit Your Understanding 3.Why is a petty cash fund always replenished on the last day of the fiscal period? SLIDE 10 ANSWER To assure that all expenses are recorded during the fiscal period in which they occurred. Lesson 1-1 page 11