1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9-1 Journalizing Purchases Using a Purchases Journal

2. CENTURY 21 ACCOUNTING © Thomson/South-Western Merchandising Business Merchandise – goods purchased to sell Examples: Toothpaste, Paper Towel, Dish Soap Merchandising Business – A business that sells goods Examples: Target, Walmart, RiteAid

3. CENTURY 21 ACCOUNTING © Thomson/South-Western Two Types of Merchandising Businesses Retail Merchandising Business – sells to those who use or consume the product Example: Walmart, Target, RiteAid Whole Sale Merchandising Business – sells to a business that will resell the goods to a Retail Merchandiser. Example: Hughes Supply Charlotte – Plumbing Empire Distributors - Alcohol

4. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 9-1 COST OF MERCHANDISE page 236 Cost of Merchandise Decreases Sales so it has a debit balance The cost of goods purchased to resell to customers. Markup The amount added to the cost of goods. Vendor The business used to purchase goods. Sold gold earrings:$500.00 Cost of gold earrings: -300.00 Actual Revenue Earned:$200.00 Cost of Merchandise

5. CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 9-1 Chart of Accounts for a Merchandising Business page 236 Partial Chart of Accounts 410Sales -------------------------- 510Purchases 520Purchases Discount 530Purchases Returns & Allowance ------------------------- 610Advertising Expense 620Insurance Expense 630Supplies Expense

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 9-1 SPECIAL JOURNALS page 236 Frequently used transactions can be recorded in a special journals: Purchases Journal – to record purchases ON ACCOUNT Cash Payments Journal – to record cash payments Sales Journal – to record sales of merchandise ON ACCOUNT Cash Receipts Journal – to record cash received

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 9-1 PURCHASES JOURNAL page 237 Special Amount Column – Saves time when creating frequently occurring transactions

8. CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 9-1 2 1.Stamp the date received and purchase invoice number. PURCHASE INVOICE 1 3 4 page 238 4.Review the vendor’s terms. 3.Initials of the person who checked the invoice. 2.Place a check mark by each amount.

9. CENTURY 21 ACCOUNTING © Thomson/South-Western Vendor Terms When must the invoice be paid? TERMSindicate terms of payment 30 daysThe invoice is due 30 days from the invoice date. If the Invoice Date is October 26, the Due Date is November 24.

10. CENTURY 21 ACCOUNTING © Thomson/South-Western 10 LESSON 9-1 PURCHASING MERCHANDISE ON ACCOUNT 1 2 34 page 239 November 2. Purchased merchandise on account from Crown Distributing, $2,039.00. Purchase Invoice No. 83. 1.Write the date. 2.Write the vendor name. 3.Write the purchase invoice number. 4.Write the amount of the invoice.

11. CENTURY 21 ACCOUNTING © Thomson/South-Western 11 LESSON 9-1 TOTALING AND RULING A PURCHASES JOURNAL 2 3 45 page 240 1 6 1.Rule a single line across the amount column. 2.Write the date. 3.Write the word Total. 4.Add the amount column. 5.Write the total. 6.Rule double lines across the amount column.