1. LESSON 9-1 Journalizing Purchases Using a Purchases Journal
8/26/2018
LESSON 9-1
Journalizing Purchases Using a Purchases Journal

2. Merchandising Businesses
Lesson 9-1
Merchandising Businesses
LO1
Goods that a business purchases to sell are called merchandise.
A business that purchases and resells goods is called a merchandising business.
A merchandising business that sells to those who use or consume the goods is called a retail merchandising business.
A wholesale merchandising business buys and resells merchandise primarily to other merchandising businesses.

3. Lesson 9-1
Forming a Corporation
A corporation is an organization with the legal rights of a person which many persons or other corporations may own.
The articles of incorporation, a legal document that identifies basic characteristics of a corporation, is a part of the application submitted to a state to become a corporation.
A state approves the formation of a corporation by issuing a charter, the legal right for a business to conduct operations as a corporation.
Continued on next slide.

4. Lesson 9-1
Forming a Corporation
Each unit of ownership in a corporation is called a share of stock.
The owner of one or more shares of stock is called a stockholder.
The total shares of ownership in a corporation are called capital stock.
Continued on next slide.

5. Using Special Journals
Lesson 9-1
Using Special Journals
A journal used to record only one kind of transaction is called a Special Journal.
Continued on next slide.

6. Purchasing Merchandise
Lesson 9-1
Purchasing Merchandise
The price a business pays for goods it purchases to sell is called a cost of merchandise.
The amount added to the cost of merchandise to establish the selling price is called markup.
A business from which merchandise is purchased or supplies or other assets are bought is called a vendor.
Continued on next slide.

7. PURCHASING MERCHANDISE
page 236
LESSON 9-1

8. Lesson 9-1
Purchases on Account
A transaction in which the merchandise purchased is to be paid for later is called a purchase on account.
Continued on next slide.

9. PURCHASES ON ACCOUNT
page 236
LESSON 9-1

10. Lesson 9-1
Purchases Journal
A special journal used to record only purchases of merchandise on account is called a purchases journal.
Purchases journal has a special amount column similar to out special column journal.

11. PURCHASES JOURNAL
page 237
LESSON 9-1

12. Lesson 9-1
Purchase Invoice
An invoice used as a source document for recording a purchase on account transaction is called a purchases journal.
An agreement between a buyer and a seller about payment for merchandise is called the terms of sale.

13. PURCHASE INVOICE
page 238 1 4 2 3
1. Stamp the date received and purchase invoice number.
3. Initials of the person who checked the invoice.
2. Place a check mark by each amount.
4. Review the vendor’s terms.
LESSON 9-1

14. PURCHASING MERCHANDISE ON ACCOUNT
page 239
November 2. Purchased merchandise on account from Crown Distributing, $2, Purchase Invoice No. 83. 2 1 3 4
1. Write the date.
2. Write the vendor name.
3. Write the purchase invoice number.
4. Write the amount of the invoice.
LESSON 9-1

15. TOTALING AND RULING A PURCHASES JOURNAL
page 240 1 4 5 3 2 6
1. Rule a single line across the amount column.
4. Add the amount column.
5. Write the total.
2. Write the date.
6. Rule double lines across the amount column.
3. Write the word Total.
LESSON 9-1

16. Journalizing Cash Payments Using a Cash Payments Journal
LESSON 9-2
Journalizing Cash Payments Using a Cash Payments Journal

17. Lesson 9-4
CASH PAYMENTS JOURNAL
A cash payments journal is a special journal used to record only cash payment transactions.

18. CASH PAYMENT OF AN EXPENSE
page 243
November 2. Paid cash for advertising, $ Check No. 292. 1 2 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

19. BUYING SUPPLIES FOR CASH
LESSON 9-2
8/26/2018
BUYING SUPPLIES FOR CASH
page 243
November 5. Paid cash for office supplies, $ Check No. 293. 1 2 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

20. CASH PAYMENTS FOR PURCHASES
page 244
November 7. Purchased merchandise for cash, $ Check No. 301. 2 1 3 4 5
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

21. Lesson 9-4
Cash Discount
A cash discount is a deduction that a vendor allows on an invoice amount to encourage prompt payment.
When a company that has purchased merchandise on account takes a cash discount, it is called a purchases discount.
A journal amount column that is not headed with an account title is called a general amount column.

22. Lesson 9-4
Trade Discount
The retail price listed in a catalog or on an Internet site is called a list price.
A trade discount is a reduction in the list price granted to a merchandising business.
An account that reduces a related account on a financial statement is called a contra account.

23. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS
page 245
November 8. Paid cash on account to Gulf Craft Supply, $488.04, covering Purchase Invoice No. 82 for $498.00, less 2% discount, $9.96. Check No. 302. 5 6 1 2 4 3
1. Write the date.
2. Write the account title of the vendor.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
6. Write the credit amount.
LESSON 9-2

24. CASH PAYMENTS ON ACCOUNT WITHOUT PURCHASES DISCOUNTS
page 246
November 13. Paid cash on account to American Paint, $2,650.00, covering Purchase Invoice No. 77. Check No. 303. 1 2 4 5 3
1. Write the date.
2. Write the vendor account title.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
LESSON 9-2

25. LESSON 9-3 Performing Additional Cash Payments Journal Operations
8/26/2018
LESSON 9-3
Performing Additional Cash Payments Journal Operations
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26. PETTY CASH REPORT 1. Write the date and custodian name. 1
LESSON 9-3
8/26/2018
PETTY CASH REPORT
page 248
1. Write the date and custodian name. 1
2. Write the fund total.
3. Summarize petty cash payments. 2 3
4. Calculate and write the total payments. 4
5. Calculate and write the recorded amount on hand. 5 6 7 8
6. Write the actual amount of cash on hand.
7. Subtract the actual amount on hand from the recorded amount on hand and write the amount.
8. Write the total of the replenish amount.
LESSON 9-3
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27. REPLENISHING A PETTY CASH FUND
LESSON 9-3
8/26/2018
REPLENISHING A PETTY CASH FUND
page 249
1. Date
2. Account titles
3. Check number
4. Expense amounts
5. Cash short as a debit; cash over as a credit
6. Total cash payment 4 5 6 1 3 2
LESSON 9-3
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28. Lesson 9-4
CASH SHORT AND (OVER)
A petty cash on hand amount that is less than recorded amount is called a cash short.
Less cash in Petty Cash
Debit Cash Short and Over
A petty cash on hand amount that is more than recorded amount is called a cash over.
More cash in Petty cash
Credit Cash Short and Over

29. TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARD1 4 2 3 5 6
1. Rule a single line.
2. Write the date.
3. Write the words Carried Forward in the Account Title column.
4. Place a check mark in the Post. Ref. column.
5. Write each column total.
6. Rule double lines.
LESSON 9-3

30. STARTING A NEW CASH PAYMENTS JOURNAL PAGE
LESSON 9-3
8/26/2018
STARTING A NEW CASH PAYMENTS JOURNAL PAGE
page 251 1 5 2 3 4
1. Write the journal page number.
2. Write the date.
3. Write the words Brought Forward in the Account Title column.
4. Place a check mark in the Post. Ref. column.
5. Record the column totals.
LESSON 9-3
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31. LESSON 9-3
8/26/2018
TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A MONTH
page 252 1 2 3 4 5
1. Rule a single line.
2. Write the date.
3. Write the word Totals in the Account Title column.
4. Write each column total.
5. Rule double lines.
LESSON 9-3
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32. LESSON 9-4 Journalizing Other Transactions Using a General Journal
8/26/2018
LESSON 9-4
Journalizing Other Transactions Using a General Journal
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33. MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT
LESSON 9-4
8/26/2018
MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT
page 254
LESSON 9-4
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34. BUYING SUPPLIES ON ACCOUNT
LESSON 9-4
8/26/2018
BUYING SUPPLIES ON ACCOUNT
page 255
November 6. Bought store supplies on account from Gulf Craft Supply, $ Memorandum No. 52. 2 4 3 7 1 6 5
1. Write the date.
5. Write the account title and vendor name.
2. Write the account title.
6. Place a diagonal line in the Post. Ref. column.
3. Write the memorandum number.
4. Write the debit amount.
7. Write the credit amount.
LESSON 9-4
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35. PURCHASES RETURN AND ALLOWANCE
Lesson 9-4
PURCHASES RETURN AND ALLOWANCE
Credit allowed for the purchase price of returned merchandise, resulting in a decrease accounts payable, is called a purchases return.
Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease accounts payable, is called a purchases allowance.
A form prepared by the customer showing the price deduction taken by the customer for the returns and allowances is called a debit memorandum.

36. DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES
page 256
LESSON 9-4

37. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES
page 257
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78. 2 5 1 3 4 6 7
1. Write the date.
4. Write debit memorandum number.
2. Write the account title and vendor name.
5. Write the amount.
6. Write Purchases Returns and Allow.
3. Place a diagonal line in the Post. Ref. column.
7. Write the amount.
LESSON 9-4