1. Special journals: Purchases and cash Payments
Chapter 17

2. Special Journals Journal Transaction Sales Journal
Sale of Merchandise on Account
Cash Receipts Journal
Receipt of Cash (Debit Cash)
Purchases Journal
Purchase of Any Asset on Account
Cash Payments Journal
Payment of Cash (Credit Cash)

3. Journalizing in the Purchases Journal
Purchases Journal – a special journal used to record purchase of any asset on account
One line
Accounts Payable (always), Purchases Debit, General Debit
Remember: Resellers do not pay tax on merchandise
5 Steps for merchandise
Outlined on pg 483
Extra step for General Debit (account name)

4. Posting From Purchases Journal to the AP Subsidiary Ledger
Post daily from Purchases Journal to AP Subsidiary
Similar process compared to posting from Sales Journal
Post Reference P# (P for Purchases Journal)

5. Completing the Purchases Journal
Do not post each transaction separately
Post totals
Accounts Payable (C) and Purchases (D)

6. Footing, Proving, Totaling and Ruling
Single Rule each column
Foot the columns
Footing – a column total written small and in pencil
Prove the journal – Test for the equality of debits and credits.
Separate sheet of paper
Enter the total amounts, in ink, below the footings
Double Rule

7. Proving at the end of a page
Carried Forward
No Double Rule
Brought Forward

8. The Cash Payments Journal
Cash Payments Journal – A special journal used to record transactions in which cash is paid out
Used anytime a company spends cash
Purchasing merchandise (cash sales, bankcard sales)
Payment to creditors
Buying other Assets
???
3 Accounts
Cash, Purchases Discounts and General are the credits
General and Accounts Payable debits

9. Other Cash Payments Payment of Payroll – see pg 493
Use General columns
Debit – Salaries expense
Credit – Withholding payables
Bank Service Charges
General Column
Debit Miscellaneous Expense

10. Cash Payments Journal
Book Examples
Steps go from left to right

11. Posting from Cash Payments Journal
Checks and account numbers
Checks for Creditors
Account number if you use General columns

12. Schedule of Accounts Payable
Schedule of accounts payable – lists each creditor, the balance and the total due from all creditors
Sum on Schedule of AP equals balance in AP controlling account
Detects errors in calculations and failing to post
Does not detect errors of posting to wrong creditor

13. Cash Proof
Proving cash – the process of verifying that cash recorded in the acct’g records agrees with the amount in the checkbook
See page 501
Beginning Cash balance
+ cash receipts
- cash payments
Ending Cash balance
Compare to check stub balance

14. Workbook
Projects 1,2,3,4,6,8