Jobs Chapter 12

Jobs Chapter 12

How to keep a record of amounts owed to creditors How to prepare a schedule of Accounts Payable How to use and post a purchases journal How to use and post a cash payments journal How to use and post a purchases returns and allowances journal How to file purchase invoices and credit memos

 Creditors  People or businesses to whom your company owes money.  Compare to Customers  Accounts Payable Ledger  Group of creditor accounts ▪ Compare to AR Ledger  Purchase on Account  When your company buys merchandise on credit from another company.  Compare to Sold Merchandise on Account  Schedule of Accounts Payable  A list of what creditors are owed.  Compare to Schedule of A/R

 Purchases, what do they do to A/P?  increase A/P  Payments, what do they do to A/P?  decrease A/P  Credit Memos, what do they do to A/P  decrease A/P DR ( -) decrease Checks Credit Memos CR (+) increase Purchases Invoice (NB) Accounts Payable A/P

 Purchases Journal  Records all Purchases of Merchandise on Account  Records all Purchases from creditors by date. Purchases Invoice Purchases Journal AP Ledger CR

1. Copy the date 2. Copy cash or invoice # or Cr. Memo Number 3. Copy the Journal and Page Number 4. Copy the amount 5. Calculate new balance 6. Copy account number ▪ Simply go from the left to the right for steps 1-5. ▪ Step 6 is showing that you completed steps 1-5.

 Cash Payments Journal  Records all payments of cash to creditors  Records all payments to creditors by date. Check Stub Cash Payments Journal AP Ledger DR

 Purchased Journal  Purchases Invoice—Source Document  Records all purchases of merchandise purchased on account  Recorded as a CR to A/P  Cash Payments Journal  Check stub—Source Document  Records all payments of cash made to creditors  Recorded as DR to A/P

 Purchases Journal  Records all Purchases of Merchandise on Account  Records all Purchases from creditors by date. Purchases Invoice Purchases Journal AP Ledger CR Check Stub Cash Payments Journal AP Ledger DR

 Purchases Returns and Allowances Journal  Records all Returns of Merchandise to creditors  Records all allowances given by creditors. Debit Memo—Source Document Purchases Returns and Allowances Journal AP Ledger DR ▪ Schedule of A/P—Listing of all creditors with a balance due.