Learning Targets Chapter 9 I will be responsible for knowing and understanding the following concepts: Accounting Terms Related to the purchases and cash payments journals Accounting Concepts and Practices related to the purchases and cash payments journals Journalize Purchases of Merchandise using a purchases journal Journalize Cash Payments and Cash Discounts using a cash payments journal Prepare a petty cash report and journalize the reimbursement Total, prove, and rule a cash payments journal Journalize purchases returns, and allowances. I will be able to listen to my instructor and take notes, be an active participant as needed.
Learning Targets 9-1 I will be responsible for knowing and understanding the following concepts: Journalizing Purchases and Using a Purchases Journal Merchandising Businesses Corporations Special Journals I will be able to listen to my instructor and take notes, be an active participant as needed. I will complete 9-1 Workbook activities as assigned
TechKnow Consulting Merchandising Business LESSON 9-1 4/13/2017 TechKnow Consulting Merchandising Business Retail vs Wholesale What are some merchandising and services businesses in the area? Corporation Share of Stock, Capital Stock, Stockholder Why might a business form a corporation? 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 the merchandise to retail merchandising businesses Corporation: An organization with the legal rights of a person and which many persons may own LESSON 9-1
Expanding the Ledger-Special Journals Used to record similar types of transactions. If a transaction cannot be recorded in a special journal, the company records it in the general journal. LESSON 9-1
PURCHASING MERCHANDISE LESSON 9-1 4/13/2017 PURCHASING MERCHANDISE Cost of Merchandise Markup Vendor Cost of Merchandise: the prices a business pays for goods it purchases to sell Markup: To make a profit, businesses add $$$ to the cost Vendor: Sells supllies/merchandise to other businesses
- has a normal debit balance LESSON 9-1 4/13/2017 Purchases Account -Temporary account - reduces capital - has a normal debit balance PURCHASES ON ACCOUNT Purchases Account – the account used for recording the cost of merchandise.
LESSON 9-1 4/13/2017 PURCHASES JOURNAL: A special journal used to record ONLY Purchases of merchandise ON ACCOUNT A purchase on account transaction is recorded on only one line of the purchases journal A purchase made for cash IS NOT recorded in this journal Every purchase on account will have a purchase invoice issued from the vendor. 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 **Using special amount columns eliminates writing general ledger account titles **SAVES TIMES**
LESSON 9-1 4/13/2017 PURCHASE INVOICE 1 4 2 Purchase Invoice: The source document used for recording all purchases Terms of Sale: An agreement between a buyer and seller about payment for merchandise. Historical Cost: is applied when the actual amount pd for merchandise or other items bought is recorded 3 1. Stamp the date received and purchase invoice number. 3. Initials of the person who checked the invoice. 2. Place a check mark by each amount. 4. Review the vendor’s terms.
PURCHASING MERCHANDISE ON ACCOUNT November 2. Purchased merchandise on account from Crown Distributing, $2,039.00. Purchase Invoice No. 83. 2 1 3 4 1. Write the date. 2. Write the vendor name. 3. Write the purchase invoice number. 4. Write the amount of the invoice.
TOTALING AND RULING A PURCHASES JOURNAL LESSON 9-1 4/13/2017 TOTALING AND RULING A PURCHASES JOURNAL 1 4 5 3 2 Single Line = adding Double Line = information verified Always done at the end of the month 6 1. Rule a single line across the amount column. 4. Add the amount column. 5. Write the total. 2. Write the date. 6. Rule double lines across the amount column. 3. Write the word Total.
Classwork/Homework Work Together 9-1 pg. 241, WB pg. 193 On Your own 9-1 pg. 241 WB pg. 194 LESSON 9-1
Learning Targets 9-2 I will be responsible for knowing and understanding the following concepts: Accounting terms related to cash payments for a merchandising business Accounting practices as they relate to cash payments for a merchandising business Accounting practices as they relate to the Cash Payments Journal I will be able to listen to my instructor and take notes, be an active participant as needed. I will complete 9-2 Workbook activities as assigned
Expanding the Ledger-Special Journals Used to record similar types of transactions. If a transaction cannot be recorded in a special journal, the company records it in the general journal.
LESSON 9-1 4/13/2017 Cash Payments Journal Cash discount – a deduction that a vendor allows on the invoice amount to encourage prompt payment Purchases discount – cash discount on purchases taken by a customer. The customer pays less than the invoice amount previously recorded in the purchases account. Cash Payments Journal A special journal used to record ONLY cash payment transactions Has a general amount column AND special amount columns a percentage deducted from the invoice amount – 2/10, n/30 - means 2% of the invoice amount may be deducted if the invoice is paid within 10 days of the invoice date. Net 30 means the total amount must be paid within 30 days.
Cash Payment of an Expense 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.
Cash Payment for Supplies 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.
Cash Payments for Purchases LESSON 9-1 4/13/2017 Cash Payments for Purchases November 7. Purchased merchandise for cash, $600.00. Check No. 301. 2 1 3 4 5 1. Write the date. List Price – retail price listed in a catalog or internet site Trade Discount – a reduction in the list price granted to customers Invoice Amount – the amount after the trade discount has been deducted from the list price. Only this amount is used in an journal entry. Contra Account – an account that reduces a related account on a financial statement 2. Write the account title. 3. Write the check number. 4. Write the debit amount.
Cash Payments on Account with Purchases Discount 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.
Cash Payments on Account Without purchases Discounts 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.
Classwork/Homework Work Together 9-2 pg. 247, WB pg. 195 On your Own 9-2 pg. 247 WB pg. 196
Learning Targets 9-3 I will be responsible for knowing and understanding the following concepts: Accounting terms related to cash payments for a merchandising business Accounting practices as they relate to cash payments for a merchandising business Accounting practices as they relate to the petty cash / petty cash reports I will be able to listen to my instructor and take notes, be an active participant as needed. I will complete 9-3 Workbook activities as assigned
Petty Cash Report 1. Write the date and custodian name. 1 LESSON 9-1 4/13/2017 Petty Cash Report 1. Write the date and custodian name. 1 2. Write the fund total. 3. Summarize petty cash payments. 2 3 4. Calculate and write the total payments. 4 5. Calculate and write the recorded amount on hand. 5 6 Cash Short – a petty cash on hand amount that is less than the recorded amount Cash Over - a petty cash on hand amount that is more than a recorded amount 7 8 6. Write the actual amount of cash on hand. 7. Subtract the actual amount on hand from the recorded amount on hand and write the amount. 8. Write the total of the replenish amount.
Replenishing a Petty Cash Fund LESSON 9-1 4/13/2017 Replenishing a Petty Cash Fund 1. Date 2. Account titles 3. Check number 4. Expense amounts 5. Cash short as a debit; cash over as a credit 6. Total cash payment 4 5 6 1 3
LESSON 9-1 4/13/2017 TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARD 1 4 2 3 5 6 1. Rule a single line. 2. Write the date. 3. Write the words Carried Forward in the Account Title column. A journal is proved and ruled whenever a journal page is filled and always at the end of the month If the TOTAL debits do not equal the TOTAL credits, the errors must be found and corrected before anymore work is completed After a journal page has been totaled and proved, the journal is ruled in preparation for forwarding to the next page. 4. Place a check mark in the Post. Ref. column. 5. Write each column total. 6. Rule double lines.
Starting a New Cash payments Journal Page 1 5 2 3 4 1. Write the journal page number. 2. Write the date. 3. Write the words Brought Forward in the Account Title column. 4. Place a check mark in the Post. Ref. column. 5. Record the column totals.
TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A MONTH 1 2 3 4 5 1. Rule a single line. 2. Write the date. 3. Write the word Totals in the Account Title column. 4. Write each column total. 5. Rule double lines.
Classwork / Homework WT 9-3 TB: 253 WB: 197 OYO 9-3 TB: 253 WB: 198
Learning Targets 9-4 I will be responsible for knowing and understanding the following concepts: Accounting terms related to purchases returns and allowances Accounting practices as they relate to purchases returns and allowances for a merchandising business Journalize purchases returns and allowances and other transactions using a general journal. I will be able to listen to my instructor and take notes, be an active participant as needed. I will complete 9-4 Workbook activities as assigned
Expanding the Ledger-Special Journals Used to record similar types of transactions. If a transaction cannot be recorded in a special journal, the company records it in the general journal. LESSON 9-1
Journalizing Other Transactions Using a General Journal LESSON 9-1 4/13/2017 Journalizing Other Transactions Using a General Journal -Buying office supplies on account for use by employees -Purchases returns and Allowances Purchases return – returned merchandise resulting in a decrease in the customer’s accounts payable Purchases allowance – credit allowed for part of the purchase price resulting in a decrease in A/P (damaged or incorrect merchandise) Contra account to Purchases – has a normal credit balance
Buying Supplies on Account November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52. 2 4 3 7 1 6 5 1. Write the date. 5. Write the account title and vendor name. 2. Write the account title. 6. Place a diagonal line in the Post. Ref. column. 3. Write the memorandum number. 4. Write the debit amount. 7. Write the credit amount. LESSON 9-1
LESSON 9-1 4/13/2017 Debit Memorandum Debit Memorandum – form prepared by the customer showing the price deduction taken by the customer for purchases returns and allowances (DM) LESSON 9-1
Journalizing Purchases Returns and Allowances November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. 2 5 1 3 4 6 7 1. Write the date. 4. Write debit memorandum number. 2. Write the account title and vendor name. 5. Write the amount. 6. Write Purchases Returns and Allow. 3. Place a diagonal line in the Post. Ref. column. 7. Write the amount. LESSON 9-1
Homework / Classwork WT: 9-4 TB pg 258 / WB pg 199 OYO: 9-4 TB pg 258 / WB pg 199 LESSON 9-1