1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 1-3 Journalizing and Posting Cash Payments

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Objectives Define accounting terms related to departmental cash payments. Identify accounting concepts and practices related to departmental cash payments. Journalize and post departmental cash payments. 2 LESSON 1-3

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Departmental Cash Payments Cash Discount: a deduction that a vendor allows on the invoice amount to encourage prompt payment Purchases Discount: a cash discount taken by a customer 3 LESSON 1-3

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 1-3 June 1. Paid cash on account to AudioMax, $514.50, covering Purchase Invoice No. 331 for surround sound audio equipment for $525.00, less 2% discount, $10.50. Check No. 315. 1.Write the date.4.Write the debit amount. 3.Record the check number. 2.Enter vendor name. 6.Enter the credit amount. 5.Record the discount amount. JOURNALIZING A PURCHASES DISCOUNT page 19 234561

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 1-3 June 2. Paid cash on account to Western Digital Systems, $781.55, covering Purchase Invoice No. 336 for video equipment for $845.00, less Debit Memorandum No. 22 for $47.50, and less 2% discount, $15.95. Check No. 316. Amount owed on invoice: Original Purchase Invoice Amount (P336) Purchase Invoice Amount After Return Purchases Return (DM22) –= $845.00 – 47.50 = $797.50 × 2% = $15.95 – $781.55 = $797.50 Purchases discount: Purchase Invoice Amount After Return Purchases Discount Purchases Discount Rate ×= Amount due after purchases discount: Purchase Invoice Amount After Return Total Amount Due Purchases Discount –= TAKING A DISCOUNT AFTER A PURCHASE RETURN page 20

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 1-3 June 2. Paid cash for administrative supplies, $136.00. Check No. 317. RECORDING ENTRIES IN A CASH PAYMENTS JOURNAL page 21 1.Write the date. 2.Enter the account title. 3.Record the check number. 4.Write the debit amount. 5.Enter the credit amount. 12345

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 1-3 June 30. Paid cash to replenish the petty cash fund, $402.00: administrative supplies, $300.00; advertising expense—video, $56.00; miscellaneous expense, $46.00. Check No. 350. 1.Write the date. 3.Record the check number. 2.Enter account titles. 4.Write the debit amounts. 5.Enter the credit amount. CASH PAYMENT TO REPLENISH PETTY CASH page 22 1 45 2 3

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 1-3 POSTING FROM A CASH PAYMENTS JOURNAL page 23

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 1-3 TERMS REVIEW cash discount purchases discount petty cash page 24