LESSON 9-4 Journalizing Other Transactions Using a General Journal 4/23/2017 LESSON 9-4 Journalizing Other Transactions Using a General Journal

Other Transactions Supplies purchased on Account (memorandum) What two accounts? Accounts Payable and Supplies Which Journal will you use? Purchases Purchases (merchandise) on Account Cash Payments Payments made with Cash Cash Receipts Received payment on account, sales for cash Sales Journal Sales on Account General Journal

Using the General Journal Use the General Journal to record transactions that do not fit in other journals. Purchasing Supplies on Account (items used in operation of the business and not for resell) Returning merchandise that you can’t sell because it is damaged or not usable.

MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT

BUYING SUPPLIES ON ACCOUNT LESSON 9-4 4/23/2017 BUYING SUPPLIES ON ACCOUNT November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52. What two accounts are impacted? Supplies Store $210 Accounts Pay/Golf Craft Supply $210

BUYING SUPPLIES ON ACCOUNT LESSON 9-4 BUYING SUPPLIES ON ACCOUNT 4/23/2017 November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52. General Journal Page:   Date Account Title Doc No Post. Ref General Debit Credit Two Ledgers for Accounts Payables One is Accounts Payable – One is Gulf Craft Subsidiary Ledger Enter credit account title / vendor Accounts Payable – Gulf Craft Supply = 1 ledger account Accounts Payable / Gulf Craft Supply = 2 ledger accounts Place a diagonal line in the Post. Ref. column (two ledger accounts impacted)

Purchase Returns & Allowance

PURCHASES RETURNS AND ALLOWANCES Two Types of Returns: Purchase Returns: Returned the entire product (damaged and unusable) – full refund Purchases allowance: credit allowed for part of the purchase price of merchandise that is not returned Decrease accounts payable (damaged but still usable) Both are recorded in the Purchases Returns & Allowance Account.

PURCHASES RETURNS AND ALLOWANCES New Account: Purchases Returns and Allowance: credit allowed for the purchase price of returned merchandise to the vendor Contra Account to Purchases (reduces a related account) Returns decrease amount you owe (accts payable debit) Has opposite NB balance from the Parent or related account Has a Normal Balance of a Credit

PURCHASES RETURNS Purchase Returns and Allowance November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. What accounts are impacted? Purchase Returns and Allowance Accounts Payable/Crown Distributing

PURCHASES RETURNS AND ALLOWANCES New Source Document: Debit memorandum: form prepared showing the price deduction taken by the business customer for returns and allowances DM45 Used for Returns only Note: returning to the vendor…… Use the General Journal for returns not a purchase, sale, receipt or payment

PURCHASES RETURNS AND ALLOWANCES Reminders When Returning merchandise we purchased Debit Memorandum = source document DM18 General Journal = Journal Entered in Purchases and Returns account Decreases the amount you owe - Accounts payable Increases the Purchases & Returns Allowance Account Contra account to Purchases Normal Balance = Credit (increases on credit, decrease on debit)

DEBIT MEMORANDUM

PURCHASES RETURNS Purchase Returns and Allowance 252.00 November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. What accounts are impacted? Purchase Returns and Allowance 252.00 Accounts Payable/Crown Distributing 252.00

JOURNALIZING PURCHASES RETURNS AND ALLOWANCES November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. What accounts are impacted? General Journal Page:   Date Account Title Doc No Post. Ref General Debit Credit Nov 06 Supplies-Store M52 2 1 00 Accounts Payable/Golf Craft Supply 1. Enter account title & vendor 3. Enter debit memorandum number. 2. Diagonal line in the Post. Ref. column (two ledger accounts) 4. Enter debit and credit amount.

TERMS REVIEW purchases return purchases allowance debit memorandum

Practice WTG 9-4

Lesson 9-4 PowerPoint Work Together General Journal Page:   Date Account Title Doc No Post. Ref General Debit Credit