1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 9-1 Journalizing Purchases Using a Purchases Journal

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Merchandising Businesses merchandise: goods that a business purchases to sell merchandising business: a business that purchases and sells goods retail merchandising business: a merchandising business that sells to those who use or consume the goods wholesale merchandising business: a business that buys and resells merchandise to retail merchandising businesses 2 LESSON 9-1

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Business Structures corporation: an organization with the legal rights of a person and which many persons may own share of stock: each unit of ownership in a corporation capital stock: total shares of ownership in a corporation stockholder: an owner of one or more shares of a corporation 3 LESSON 9-1

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Using Special Journals special journal: a journal used to record only one kind of transaction 1.Purchase Journal- for all purchases of merchandise on account 2.Cash Payment Journal- for all cash payments 3.Sales Journal- for all sales of merchandise on account 4.Cash Receipts Journal- for all cash receipts 5.General Journal- for all other transactions 4 LESSON 9-1

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PURCHASING MERCHANDISE cost of merchandise: the price a business pays for goods it purchases to sell markup: the amount added to the cost of merchandise to establish the selling price. Only markup increases CAPITAL vendor: a business from which merchandise is purchased or supplies or other assets are bought 5 LESSON 9-1 page 236 *Revenue earned from the sale of merchandise includes both the cost of merch. and markup*

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PURCHASES ON ACCOUNT purchase on account: a transaction in which the merchandise purchased is to be paid for later 6 LESSON 9-1 page 236

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PURCHASES JOURNAL purchases journal: a special journal used to record only purchases of merchandise on account special amount column: a journal amount column headed with an account title 7 LESSON 9-1 page 237

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 9-1 2 1.Stamp the date received and purchase invoice number. PURCHASE INVOICE- PURCHASE INVOICE- an invoice used as a source document for recording a purchase on account transaction 1 3 4 page 238 4.Review the vendor’s term of sale. 3.Initials of the person who checked the invoice. 2.Place a check mark by each amount.

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Purchase Invoice continued… terms of sale: an agreement between a buyer and a seller about payment for merchandise 9 LESSON 9-1

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 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 © 2009 South-Western, Cengage Learning 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.

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 9-1 TERMS REVIEW merchandise merchandising business retail merchandising business wholesale merchandising business corporation share of stock capital stock stockholder special journal cost of merchandise markup vendor purchase on account purchases journal special amount column purchase invoice terms of sale page 241