1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning SPECISLIZED JOURNALS Yesterday we looked at using a Purchase Journal. What is the purpose of a Purchase Journal? How does using a Purchase Journal help us as Accountants? Note these slides are available on the class website! 1 LESSON 9-2

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Special Journals Special journals include the following: Purchase Journal – for all purchase of merchandise on account. Cash Payments Journal – for all cash payments Sales Journal – for all sales of merchandise on account Cash Receipts Journal –for cash receipts

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning CASH PAYMENTS JOURNAL What purpose does a Cash Payments Journal serve? When do we use a Cash Payments Journal? 3 LESSON 9-2

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning CASH PAYMENTS JOURNAL The Cash Payments Journal is used only to record cash payment transactions. As such, only those columns needed to record cash payment transactions are included in a Cash Payments Journal. As with the Purchase Journal, the Cash Payments Journal consolidates what would be a double line entry in a General Journal to a single line entry in the Cash Payments Journal. 4 LESSON 9-2

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 9-2 THE CASH PAYMENTS JOURNAL page 242 Column 5 – Cash Credit - since all cash payment transactions affect the cash account, a special amount column is provided to record the credit to the cash account. Column 4 – Purchases Discount Credit Column 3 – Accounts Payable Credit Column 2&1 – General Amount Columns – for cash payments that do not occur often (ex rent expense)

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 9-2 CASH PAYMENT OF AN EXPENSE page 243 November 2. Paid cash for advertising, $150.00. Check No. 292.

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 9-2 BUYING SUPPLIES FOR CASH page 243 November 5. Paid cash for office supplies, $94.00. Check No. 293.

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 9-2 CASH PAYMENTS FOR PURCHASES page 244 November 7. Purchased merchandise for cash, $600.00. Check No. 301. While business normally pay for merchandise on account (use of the purchase journal), sometimes a cash payment for merchandise is needed.

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Concepts & Terms Normally, the total amount shown on a purchase invoice is the amount that a customer is expected to pay. To encourage early payment, however, a vendor may allow a deduction from the invoice amount, also known as terms (example 2/10, net /30) A deduction that a vendor allows on an invoice amount to encourage prompt payment is called a cash discount. A discount on purchases taken by a customer is called a purchases discount. When a purchase discount is taken, the customer pays less than the invoice amount previously recorded in the purchases account. 9 LESSON 9-2

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 9-2 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. 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. 12 3 4 6.Write the credit amount. 65

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 9-2 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.