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Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting The purchases journal is used to record credit purchases. The cash journal is used to record the cash a business pays out. Glencoe AccountingCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Explain the purpose of the purchases and cash payment journals. Record transactions in the purchases and cash payments journals. Record payroll transactions in the cash payments journal. Post from the purchases and cash payments journals to the general ledger and the accounts payable subsidiary ledger. Total, prove, and rule the purchases and cash payments journals. Prepare a schedule of accounts payable. Prove cash. Glencoe AccountingCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Key Term purchases journal The Purchases JournalSection 17.1 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Purchases Journal The Purchases JournalSection 17.1 purchases journal A special journal used to record all transactions in which items are bought on account. Purchases Journal See page 485 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Purchases Journal The Purchases JournalSection 17.1 Recording the Purchase of Merchandise on Account Business Transaction On December 14 The Starting Line received Invoice 7894 from Pro Runner Warehouse for merchandise purchased on account, $2,300, terms 2/10, n/30. See page 486 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Purchases Journal The Purchases JournalSection 17.1 Journalizing Other Purchases on Account Business Transaction On December 15 The Starting Line received Invoice 3417, dated December 13, from Champion Store Supply for store equipment bought on account, $1,200, terms n/30. See page 487 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Purchases Journal The Purchases JournalSection 17.1 Posting from the Purchases Journal See page 488 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Purchases Journal The Purchases JournalSection 17.1 Posting from the General Debit Column See page 489 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Purchases Journal The Purchases JournalSection 17.1 Totaling, Proving, and Ruling the Purchases Journal See page 489 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Purchases Journal The Purchases JournalSection 17.1 Posting the Special Column Totals to the General Ledger See page 490 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Key Terms cash payments journal schedule of accounts payable proving cash The Cash Payments Journal Section 17.2 Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Transactions Included in the Cash Payments Journal Payments to creditors for items bought on account Payments for various expenses Payments for wages and salaries Cash decreases for bank service charges and bankcard fees cash payments journal A special journal used to record all transactions in which cash is paid out or decreased. The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Cash Payments Journal See page 492 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording the Cash Purchase of an Asset Business Transaction On December 17 The Starting Line paid $1,500 to Keystone Insurance Company for the premium on a six-month insurance policy, Check See page 493 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording a Cash Purchase of Merchandise Business Transaction On December 19 The Starting Line purchased merchandise from FastLane Athletics for $1,300, Check See page 493 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording a Payment on Account Business Transaction On December 24 The Starting Line paid $2,254 to Pro Runner Warehouse for merchandise purchased on account, $2,300 less a discount of $46, Check See page 494 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording Other Cash Payments Business Transaction On December 24 The Starting Line issued Check 1004 for $275 to Dara’s Delivery Service for shipping charges on merchandise purchased from Sports Link Footwear. See page 495 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording Payment of Payroll Business Transaction On December 31 The Starting Line wrote Check 1012 for $2,974 to pay the payroll of $4,000 (gross earnings) for the pay period ended December 31. The following amounts were withheld: Employees’ Federal Income Tax, $640; Employees’ State Income Tax, $80; Social Security Tax, $248; and Medicare Tax, $58. See page 496 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording Bank Service Charges Business Transaction On December 31 The Starting Line recorded a bank service charge for $20 indicated on the bank statement. See page 496 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Using the Cash Payments Journal Section 17.2 Recording Bankcard Fees Business Transaction On December 31 The Starting Line recorded the bankcard fee of $75 that appeared on the bank statement. See page 497 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 Posting from the Cash Payments Journal See page 498 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 Posting from the General Debit Column See page 500 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 Totaling, Proving, and Ruling the Cash Payments Journal The cash payments journal is proven the same way as other special journals. See page 501 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 A schedule of accounts payable is prepared after posting the column totals. Proving the Accounts Payable Subsidiary Ledger schedule of accounts payable A list of all creditors in the accounts payable ledger, the balance in each account, and the total amount owed to all creditors. The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 Proving the Accounts Payable Subsidiary Ledger See page 503 The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Posting from the Cash Payments Journal Section 17.2 Proving Cash proving cash The process of verifying that cash recorded in the accounting records agrees with the amount entered in the checkbook. On the first line, enter the Cash in Bank beginning balance. On the next line, enter the total cash received during the month. Add the first and second lines. Subtract the cash payments for the month. Compare the result to the balance shown on the last check stub in the checkbook. The Cash Payments Journal Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Question 1 A company has these journals: sales, cash receipts, purchases, cash payments, and general. It also has the following ledgers: accounts receivable subsidiary and accounts payable subsidiary. For each of the following transactions, indicate (a) the correct journal and (b) whether the subsidiary ledger is used. 1.purchase for cash 2.purchase on credit 3.payment of accounts payable 4.purchase of equipment on credit 5.cash receipt from customer on account 6.cash discount taken on accounts payable 7.issued a check to pay an accounts payable 8.bank service charges deducted on bank statement (a) cash payments (a) purchases (b) A/P subsidiary ledger (a) cash payments (b) A/P subsidiary ledger (a) purchases (b) A/P subsidiary ledger (a) cash receipts (b) A/R subsidiary ledger (a) cash payments (b) A/P subsidiary ledger (a) cash payments Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Question 2 Look at the cash payments journal. Several columns contain information on business transactions. Indicate whether you would post only the column total with a (T), post each individual transaction with an (E), or post each to the subsidiary ledger and the column total to the controlling account in the general ledger (B). General Debit__________ General Credit__________ Accounts Payable Debit__________ Purchases Discount Credit__________ Cash in Bank Credit__________ E E B T T Home

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Question 3 You have a transaction that involves credit. Which journal(s) would you use? If credit is being granted to a customer, you would use the sales journal. If credit is being requested from a vendor, you would use the purchases journal. Home

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