Accounting II Chapter 17 Special Journals: Purchases & Cash Payment

Purchases Journal A special journal used to record all purchases on account

Recording the Purchase of Merchandise on Account On December 14 On Your Mark received Invoice 7894 from Pro Runner Warehouse for merchandise purchased on account, $2,300, terms 2/10, n/30. JOURNAL ENTRY

Posting to the Accounts Payable Subsidiary Ledger Each transaction is separately posted to the accounts payable subsidiary ledger.

Posting from the General Debit Column Daily postings are made from the General Debit column of the purchases journal to the appropriate accounts in the general ledger.

Totaling, Proving, and Ruling the Purchases Journal Steps: Draw a single rule across the three amount columns: Accounts Payable Credit, Purchases Debit, and General Debit Foot each amount column Test for equality of debits & credits Enter the date of the journal is being totaled Enter the three column totals below the footing Draw a double rule below the three amount columns.

Importance of Cash Payments Journal Cash is a major asset of a business; therefore, it is essential that a business keep accurate records of both the inflow and the outflow of cash. Used to record all transactions in which cash is paid out or decreased

Cash Payments Journal

Recording Cash Payment of an Asset Transaction: Paid $1,500 to Keystone Insurance Company for the premium on a six-month policy, Check 1001