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LESSON 9-4
Journalizing Other Transactions Using a General Journal
Other Transactions
Supplies purchased on Account (memorandum) What two accounts?
Accounts Payable and Supplies
Which Journal will you use? Purchases
Purchases (merchandise) on Account
Cash Payments Payments made with Cash
Cash Receipts Received payment on account, sales for cash
Sales Journal Sales on Account
General Journal
Using the General Journal
Use the General Journal to record transactions that do not fit in other journals. Purchasing Supplies on Account (items used in
operation of the business and not for resell) Returning merchandise that you can’t sell because
it is damaged or not usable.
MEMORANDUM FOR BUYING SUPPLIES ON ACCOUNT
BUYING SUPPLIES ON ACCOUNT
What two accounts are impacted?
November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52.
Supplies Store$210
Accounts Pay/Golf Craft Supply $210
BUYING SUPPLIES ON ACCOUNT
November 6. Bought store supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52.
Two Ledgers for Accounts Payables
One is Accounts Payable – One is Gulf Craft Subsidiary Ledger
Enter credit account title / vendor
Accounts Payable – Gulf Craft Supply = 1 ledger account
Accounts Payable / Gulf Craft Supply = 2 ledger accounts Place a diagonal line in the Post. Ref. column (two ledger accounts
impacted)
General Journal Page:
Date Account TitleDoc No
Post.Ref
General
Debit Credit
PURCHASE RETURNS & ALLOWANCE
PURCHASES RETURNS AND ALLOWANCES
Two Types of Returns:Purchase Returns:
Returned the entire product (damaged and unusable) – full refund
Purchases allowance: credit allowed for part of the purchase price of merchandise that is not returned
Decrease accounts payable (damaged but still usable)
Both are recorded in the Purchases Returns & Allowance Account.
PURCHASES RETURNS AND ALLOWANCES
New Account: Purchases Returns and Allowance: credit allowed for the
purchase price of returned merchandise to the vendor Contra Account to Purchases (reduces a related account) Returns decrease amount you owe (accts payable debit) Has opposite NB balance from the Parent or related account
Has a Normal Balance of a Credit
PURCHASES RETURNS
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
Purchase Returns and Allowance
Accounts Payable/Crown Distributing
PURCHASES RETURNS AND ALLOWANCES
New Source Document: Debit memorandum: form prepared showing the price deduction
taken by the business customer for returns and allowances DM45 Used for Returns only
Note: returning to the vendor…… Use the General Journal for returns
not a purchase, sale, receipt or payment
PURCHASES RETURNS AND ALLOWANCES
Reminders When Returning merchandise we purchased Debit Memorandum = source document DM18 General Journal = Journal Entered in Purchases and Returns account
Decreases the amount you owe - Accounts payable Increases the Purchases & Returns Allowance Account Contra account to Purchases Normal Balance = Credit (increases on credit, decrease on debit)
DEBIT MEMORANDUM
PURCHASES RETURNS
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
Purchase Returns and Allowance
Accounts Payable/Crown Distributing
252.00
252.00
3. Enter debit memorandum number.
November 28. Returned merchandise to Crown Distributing, $252.00, covering Purchase Invoice No. 80. Debit Memorandum No. 78.
What accounts are impacted?
JOURNALIZING PURCHASES RETURNS AND ALLOWANCES
4. Enter debit and credit amount.
1. Enter account title & vendor
2. Diagonal line in the Post. Ref. column (two ledger accounts)
General Journal Page:
Date Account TitleDoc No
Post.Ref
General
Debit Credit
Nov 06 Supplies-Store M52 2 1 0 00 Accounts Payable/Golf Craft Supply 2 1 0 00
TERMS REVIEW
purchases return purchases allowance debit memorandum
Practice
WTG 9-4
General Journal Page:
Date Account TitleDoc No
Post.Ref
General
Debit Credit
Lesson 9-4 PowerPoint Work Together