Journalizing Cash Payments Using a Cash Payments Journal LESSON 9-2 Journalizing Cash Payments Using a Cash Payments Journal

CASH PAYMENTS JOURNAL page 242 LESSON 9-2

CASH PAYMENT OF AN EXPENSE page 243 November 2. Paid cash for advertising, $150.00. Check No. 292. 1 2 3 4 5 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

BUYING SUPPLIES FOR CASH LESSON 9-2 7/25/2019 BUYING SUPPLIES FOR CASH page 243 November 5. Paid cash for office supplies, $94.00. Check No. 293. 1 2 3 4 5 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

Figuring Trade Discounts List Price x Trade Discount Rate = Trade Discount Hobby Shack purchased ceramic molds for $1500. They were offered a trade discount (reduction in list price) of 60%. $1500 x 60% = $900 List Price – Trade Discount = Invoice Amount $1500 - $900 = $600 LESSON 9-1

CASH PAYMENTS FOR PURCHASES page 244 November 7. Purchased merchandise for cash, $600.00. Check No. 301. 2 1 3 4 5 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

Reading Sales Terms Every invoice will have the terms of payment listed such as 30 days. This means that the business must pay the amount of the invoice within 30 days. Or vendors may offer discounts if the invoice is paid early. Terms may be listed as 2/10, n/30. If you pay within the first ten days, you pay 2% less. Invoice Amount x Purchase Discount Rate = Purchase Discount $498 x 2% = $9.96 Invoice Amount – Purchase Discount = Cash Amount Paid after Discount $498 - $9.96 = $488.04 LESSON 9-1

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. 5 6 1 2 4 3 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. 6. Write the credit amount. LESSON 9-2

Contra Accounts An account that reduces a related account on a financial statement. Purchases Discount Since contra accounts are deductions from their related accounts, normal balances are opposite those of the related account. LESSON 9-1

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. 1 2 4 5 3 1. Write the date. 2. Write the vendor account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2