Jobs 56-60Chapter 12

Jobs 56-60Chapter 12

•How to keep a record of amounts owed to creditors•How to prepare a schedule of Accounts Payable•How to use and post a purchases journal•How to use and post a cash payments journal•How to use and post a purchases returns and allowances journal•How to file purchase invoices and credit memos

Creditors People or businesses to whom your company

owes money. Compare to Customers

Accounts Payable Ledger Group of creditor accounts▪ Compare to AR Ledger

Purchase on Account When your company buys merchandise on credit

from another company. Compare to Sold Merchandise on Account

Schedule of Accounts Payable A list of what creditors are owed.

Compare to Schedule of A/R

Purchases, what do they do to A/P? increase A/P

Payments, what do they do to A/P? decrease A/P

Credit Memos, what do they do to A/P decrease A/P

DR

( -) decrease

ChecksCredit Memos

CR

(+) increase

Purchases Invoice

(NB)

Accounts Payable A/P

Purchases Journal Records all Purchases of Merchandise on Account Records all Purchases from creditors by date.

Purchases Invoice

Purchases Journal

AP Ledger CR

1. Copy the date2. Copy cash or invoice # or Cr. Memo

Number3. Copy the Journal and Page Number 4. Copy the amount5. Calculate new balance6. Copy account number

▪ Simply go from the left to the right for steps 1-5.

▪ Step 6 is showing that you completed steps 1-5.

Cash Payments Journal Records all payments of cash to creditors Records all payments to creditors by date.

Check Stub

Cash Payments Journal

AP Ledger DR

Purchased Journal Purchases Invoice—Source Document Records all purchases of merchandise

purchased on account Recorded as a CR to A/P

Cash Payments Journal Check stub—Source Document Records all payments of cash made to

creditors Recorded as DR to A/P

Purchases Journal Records all Purchases of

Merchandise on Account Records all Purchases from

creditors by date.

Purchases Invoice

Purchases Journal

AP Ledger CR

Check Stub

Cash Payments Journal

AP Ledger DR

Purchases Returns and Allowances Journal Records all Returns of Merchandise to creditors Records all allowances given by creditors.

Debit Memo—Source Document

Purchases Returns and Allowances Journal

AP Ledger DR

▪ Schedule of A/P—Listing of all creditors with a balance due.