Open Part II, An Accounting Cycle for a ……….

A Merchandising Business Organized as a Corporation

 

First, you will be introduced to the easiest of the 5 special journals:  Purchases.  A special journal is one that only has one kind of transaction recorded in it.  So the Purchases Journal will ONLY have merchandise that we, the company, have bought on account (accounts payable).

Skip Lesson 9-1        Go to Lesson 9-2

The merchandise is the stuff the company will buy, bring into the store, and sell to customers.  So when the store buys merchandise and will pay for it later, record the transaction in the PURCHASES JOURNAL.  Just record the date, the name of the creditor, the purchases invoice number, and the amount the store owes.  Look at the examples in your electronic textbook for Lesson 9-2. If I were talking to you I would say over and over, “When I see merchandise, I think Purchases.”  Merchandise bought on account is journalized in the Purchases Journal. If a check is written for the purchase, do NOT record it in the Purchases Journal. NOW, COMPLETE WORK TOGETHER 9-2 and OWN YOUR OWN 9-2.

Go to Lesson 9-3  Posting to the Accounts Payable Ledger.  Find the name of the vendor that we owe in the Accounts Payable Ledger.  (1) date (2) purchases journal page number–p11 (“p” stands for Purchases Journal-not page.)  after posting all of the individual amounts to the vendor accounts, you will post the total 2 times:  1st, debit the Purchases account for the total. 2nd, post the same total as a credit to Accounts Payable.  Both are in the General Ledger.  Now complete WT 9-3 and OYO 9-3.

Go to Lesson 9-4   The Cash Payments Journal – the second special journal  ALL CASH PAYMENTS ARE JOURNALIZED IN THE CASH PAYMENTS JOURNAL. (ALL CHECKS, DEBIT CARD TRANSACTIONS, AND ELECTRONIC FUNDS TRANSFERS ARE CASH PAYMENTS.)  Look at the examples in your electronic textbook.  For simple cash payments, put the date, just name the account, put in the check #, General debit, and Cash credit–just like you have journalized a hundred times, just in a different journal.

A cash discount is sometimes offered to a customer to encourage the customer to pay promptly-pay within 10 days rather than wait for the end of the pay period (30 days).  So if we pay the vendor within 10 days, we will take off 2% of the amount that we owe to the creditor as a reward.  Not  all of our vendors will offer us this deal.+ This is called a Purchases Discount.  Record the cash payment where there is a purchases discount as follows:

date     account name             A/P debit                                                                   Purchases Dis. CR           Cash CR

14     Galle Electric        640.00 (total amount owed before discount)          12.80 (640 x 2%)      627.20 (640-12.80)

Finally, if we buy merchandise and do not charge it; we pay cash with a check at the point of sale. *REMEMBER, when I see merchandise, I think “Purchases.”

date     account            ck #               gen. dr                                     cash CR

9         purchases            697                $480.00                                $480.00

REPLENISHING PETTY CASH FUND:

Journalize the Petty Cash Report

Debit the accounts that were paid for with petty cash, and then record Cash Short (debit) and Over (credit).  Credit cash for the total of the check written to replenish the Petty Cash fund.  One check # and one check amount in cash credit column.  Look for example in your electronic textbook:  Chapter 9-4.  Now complete WT  9-4; on Oct. 31, cash is short (dr) $1.05.  Now OYO 9-4; Nov. 30 Cash is over (CR) $1.45.

SKIP LESSON 9-5

NOW YOU ARE  READY TO COMPLETE THE APPLICATIONS PROBLEMS:  REMEMBER TO GRADE THEM.

SKIP ap 9-1. COMPLETE 9-2, 9-3, 9-4.  SKIP 9-5 (POSTING)

Study Guide, Chapter 9 (remember the Study Guide folder is at the top of your lesson screen.

I really miss you guys and wish I could show you how to do this! <3