1. Chapter 9 Journalizing Purchases Using a Purchases Journal

2. 9-1 JOURNALIZING PURCHASES USING A PURCHASES JOURNAL
Chapter 9
9-1 JOURNALIZING PURCHASES USING A PURCHASES JOURNAL
A business with the legal rights of a person and which many persons own is called a corporation.
It can own property, incur liabilities, enter into contracts in its own name, and sell ownership in itself.
Each unit of ownership in a corporation is called a share of stock.
An owner of one or more shares of a corporation is called a shareholder.
Total shares of ownership in a corporation are called capital stock.
Biggest difference between proprietorship and corporation:
CAPITAL ACCOUNT
-Proprietorship only has one capital and drawing account.
-Corporation has separate capital accounts for stock issued and for the earnings kept in the business.

3. Merchandising Business purchases and sell goods.
Chapter 9
Merchandising Business purchases and sell goods.
Retail - Sells to consumers
Wholesale - Sells to retailers
Special Journal:
A journal used to record only ONE type of transaction.
Five Special Journals used:
Purchases journal - ALL purchases of merchandise on account.
Cash payments journal - ALL cash payments.
Sales journal - ALL sales of merchandise on account.
Cash receipts journal - ALL cash receipts.
5. General journal - ALL other transactions.

4. PURCHASING MERCHANDISE
Chapter 9
PURCHASING MERCHANDISE
Cost of Merchandise Sold:
The price a business pays for goods it purchases to sell.
Markup: The amount added to the cost of merchandise.
Purchases is classified as a
cost account.
Has a normal debit balance.
It is a temporary account.
Only used for merchandise purchased - NOT SUPPLIES

5. Chapter 9
PURCHASES ON ACCOUNT
page 236
A transaction in which merchandise purchased is to be paid
for later is called a purchase on account.
To avoid a bulky general ledger, the total amount owed to vendors is summarized in a single general ledger account Accounts Payable.

6. Chapter 9
PURCHASES JOURNAL
page 237
A purchases journal is a special journal used ONLY to record purchases of merchandise on account.
Hobby Shack uses a special amount column because all purchase
on account transactions involve purchases debit and acct. pay credit.

7. PURCHASE INVOICE A source document for purchase on accounts
Chapter 9
PURCHASE INVOICE A source document for purchase on accounts
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.

8. PURCHASING MERCHANDISE ON ACCOUNT
Chapter 9
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.

9. TOTALING AND RULING A PURCHASES JOURNAL
Chapter 9
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.

10. 9-2 JOURNALIZING CASH PAYMENTS USING A CASH PAYMENTS JOURNAL
Chapter 9
9-2 JOURNALIZING CASH PAYMENTS USING A CASH PAYMENTS JOURNAL
page 242
A special journal used to record ONLY cash payment transactions.

11. CASH PAYMENT OF AN EXPENSE
Chapter 9
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.

12. BUYING SUPPLIES FOR CASH
Chapter 9
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.

13. CASH PAYMENTS FOR PURCHASES
Chapter 9
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.

14. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS
Chapter 9
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.

15. 9-3 PERFORMING ADDITIONAL CASH PAYMENTS JOURNAL OPERATIONS
Chapter 9
9-3 PERFORMING ADDITIONAL CASH PAYMENTS JOURNAL OPERATIONS
page 248 1
PETTY CASH REPORT
1. Write the date and custodian name. 2
2. Write the fund total. 3
3. Summarize petty cash payments. 4
4. Calculate and write the total payments. 5 6
5. Calculate and write the recorded amount on hand. 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.

16. REPLENISHING A PETTY CASH FUND
Chapter 9
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

17. Chapter 9
TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARD
page 250 1 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.

18. STARTING A NEW CASH PAYMENTS JOURNAL PAGE
Chapter 9
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.

19. Chapter 9
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.

20. 9-4 JOURNALIZING OTHER TRANSCATIONS USING A GENERAL JOURNAL
Chapter 9
9-4 JOURNALIZING OTHER TRANSCATIONS USING A GENERAL JOURNAL
page 254
Memorandum for buying supplies on account.

21. BUYING SUPPLIES ON ACCOUNT
Chapter 9
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.

22. DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES
Chapter 9
DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES
page 256
Purchases Return- Credit allowed for the purchase price of returned
merchandise decreasing customer’s accounts payable.
Purchases Allowance - Credit allowed for part of the purchase price
of merchandise that is not
returned, decreasing
customer’s acct. pay.
Debit Memo - source
document used to show
decrease in vendor acct.

23. JOURNALIZING PURCHASES RETURNS AND ALLOWANCES
Chapter 9
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.