1. LESSON 1-3 Journalizing and Posting Cash Payments
4/26/2017
LESSON 1-3
Journalizing and Posting Cash Payments
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2. Chapter 1 Objectives Recording Departmental Purchases and Cash Payments
After studying Chapter 1, you will be able to:
Define accounting terms related to departmental purchases and cash payments.
Identify accounting concepts and practices related to departmental purchases and cash payments.
Journalize and post departmental purchases and purchases returns.
Journalize and post departmental cash payments.
LESSON 1-3

3. Using Accounting Principles and Records
cash discount: a deduction that a vendor allows on the invoice amount to encourage prompt payment
purchases discount: a cash discount on purchases taken by a customer
petty cash: an amount of cash kept on hand and used for making small payments
LESSON 1-3

4. JOURNALIZING A PURCHASES DISCOUNT
page 19
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, $ Check No. 315. 1 2 3 4 5 6
1. Write the date.
4. Write the debit amount.
2. Enter vendor name.
5. Record the discount amount.
3. Record the check number.
6. Enter the credit amount.
LESSON 1-3

5. TAKING A DISCOUNT AFTER A PURCHASE RETURN
page 20
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, $ 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
Purchases discount:
Purchase Invoice Amount After Return
Purchases
Discount
Purchases Discount Rate × =
$797.50 × 2% =
$15.95
Amount due after purchases discount:
Purchase Invoice Amount After Return
Total
Amount Due
Purchases Discount – = –
$15.95
$781.55 =
$797.50
LESSON 1-3

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

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

8. POSTING FROM A CASH PAYMENTS JOURNAL
page 23
LESSON 1-3

9. DEFINE TERMS REVIEW In Quizlet
page 24
Edit this set: Chapter 1AdvAcc (then SAVE)
cash discount
purchases discount
petty cash
LESSON 1-3

10. Exit Ticket for today: Audit Your Understanding 1-3
In a Word Document, SaveAS: Chapter1-3AYUYourName
And drop in my Inbox today!
What general ledger accounts are affected, and how, by a cash payment on account for video equipment that includes a purchases discount?
Where are cash payments affecting accounts that are not listed in the column headings recorded?
Why is a petty cash fund always replenished on the last day of a fiscal period.
LESSON 1-3

11. Complete the following assignments for Chapter 1-3 today
Define Terms Review on page 24.
Answer Audit Your Understanding questions on page 24.
Complete Work Together 1-3 on Aplia – page 24
Complete On Your Own 1-3 on Aplia – page 24
Complete Application Problem 1-3 on Aplia – page 27.
LESSON 1-3