Chapter 17: Special Journals: Purchases and Cash PaymentsThe Accounting Cycle for a Merchandising Corporation!!!
Understand the Special Journals by being able to… Explain the purpose of the purchases & cash payments journals Record transactions in the purchases & cash pavements journals Post from the special journals to the General Ledger & Subsidiary Ledgers Total, prove & rule the purchases & cash payments journals Prepare a schedule of accounts payable Prove cash. Define the accounting terms used in this chapter.
SalesJournal Sale of merchandiseCash Receipts on account Receipt of all cash Journal Purchase of anyPurchases Journal asset on accountCash Payments Payment of cash, including Journal payments by checkGeneral Journal Any transaction that does not fit into special journals
Purchase of any asseton accountSource document:purchase invoice
Received Invoice 7894 from Pro Runner Warehouse for merchandise purchased on account, $2,300, terms 1/20, n/30.
Purchased store equipment from Champion Store Supply on account for $1200, Invoice #3417.
Used to record alltransactions in which cash ispaid out or decreased, suchas checks & banks statementsSource document: check orbank statement
Paid $1,500 to Keystone Insurance company for the premium on a six-month insurance policy, check 1001Start here on Monday.
Purchased merchandise from Fast Lane Athletics for $1,300, ck 1002
Posting Rules Commit to memory: 1. Post Daily: Any General Debit or Credit column to Gen. Ledger Accounts Receivable & Accounts Payable to Subsidiary Ledger 2. Post at End of Month: All special amount columns with account names
Process of verifying that cashrecorded in accountingrecords agrees with amountentered in checkbook