Special Journals: Purchases and Cash Payments

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Chapter 17

Special Journals Purchases and Cash Payments

Making Accounting Relevant Merchandising
businesses operate on a cycle of buying and
selling goods.

Select a local business. Discuss the operations
of the business how items are purchased for
resale, how the merchandise is displayed and
stocked, how sales are conducted, and how the
business might pay for this merchandise.

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Chapter 17
Section 1 The Purchases Journal

• What Youll Learn
• The purpose of the purchases journal.
• How to record purchases on account in the
  purchases journal.
• How to post from the purchases journal to the
  general and accounts payable subsidiary ledger
  accounts.
• How to total, prove, and rule the purchases
  journal.

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Section 1 The Sales Journal (cont.)
Chapter 17

Why Its Important The purchases journal helps
businesses keep track of purchases on account.

• Key Terms
• purchases journals

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Section 1 The Sales Journal (cont.)
Chapter 17

The Purchases Journal A special journal used to
record all purchases on account.



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Section 1 The Sales Journal (cont.)
Chapter 17

Recording the Purchase of Merchandise on Account
Business Transaction

On December 14 On Your Mark received Invoice
7894 from Pro Runner Warehouse for merchandise
purchased on account, 2,300, terms 2/10, n/30.

JOURNAL ENTRY

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Section 1 The Sales Journal (cont.)
Chapter 17

Posting to the Accounts Payable Subsidiary
Ledger Each transaction is separately posted to
the accounts payable subsidiary ledger.



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Section 1 The Sales Journal (cont.)
Chapter 17

Posting from the General Debit Column Daily
postings are made from the General Debit column
of the purchases journal to the appropriate
accounts in the general ledger.



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Section 1 The Sales Journal (cont.)
Chapter 17

Totaling, Proving, and Ruling the Purchases
Journal To complete the purchases journal,
follow these steps

1. Draw a single rule across the three amount
columns Accounts Payable Credit, Purchases
Debit, and General Debit. 2. Foot each amount
column. 3. Test for the equality of debits and
credits.


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Section 1 The Sales Journal (cont.)
Chapter 17

Totaling, Proving, and Ruling the Purchases
Journal (cont.)
4. In the Date column, on the line below the
single rule, enter the date the journal is being
totaled. 5. On the same line, write the word
Totals in the Creditors Account Credited
column. 6. Enter the three column totals, in ink,
just below the footings. 7. Draw a double rule
across the three amount columns.



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Section 1 The Sales Journal (cont.)
Chapter 17

Check Your Understanding

In the purchases journal, the General Debit
column total is not posted. Explain why.