Pg. 415 Exam 2 BMCC Using 1. purchases, 2. Cash payments, 3. Sales, 4. Cash receipts, 5. General Journal

Sold Merchandise, got paid on September 5th.

Cash Receipts. Money comes in. Did the company receive cash? Yes. Cash receipts journal.

Received 425 from grandma

Cash receipts. Did the company receive cash?- Yes. Records in cash receipts journal.

3. The purchases Journal-

(The purchases Journal)- Special journal used to record all purchases of merchandise inventory, office supplies and other assets on account. A merchandising business purchases merchandise inventory and other items such as office supplies, equipment and furniture on account. The purchases journal handles these transactions plus other purchases incurred on account. (Cash purchases are not record in the purchases journal, instead they are recorded i the cash payments journal). The purchases journal has special columns for: credits to accounts payable b) Debits to merchandise inventory, office supplies and other accounts The other accounts DR columns are used for purchased on account of items other than merchandise inventory and office supplies. This business used a perpetual inventory system. In a periodic inventory system, the merchandise inventory DR column would be replaced with a column titled purchased DR. (Recording Transactions)- Lets begin by looking at the first transaction. On novegebr 2, the business purchased merchandise inventory costing $700 from hanes textiles. If the transaction had been recorded i the general journal, the following entry would have been recorded: Debit= Merchandise Inventory 700 Credit- Accounts payable 700

4. Cash Payments Journal

4. Cash Payments journal- business make most cash payments by check, and all checks (and payments of currency) are recorded in the cash payments journal. This special journal is also called the check register and the cash disbursements journal. Cash payments journal- special journal used to record cash payments by check and currency. The cash payments journal has two debit columns- one for other accounts and one for accounts payable. Its has two credit columns- one for merhcandise inventory(for purchase discounts) and one for cash - This special journal also has columns for the date and check number of each payments and the account debited. Recording Transactions- On November 15, the business paid the vendor, Hanes Textiles, on account with credit terms of 3/15, n/30. Paying with the discount period allowed 3% discount ($21), and the business paid the remaining $679 (700 less the 21 discount). If the business had recorded the transaction in the general journal, the following would have been recorded. Nov 15: Debit= Accounts Payable 700 Credit= Cash 679 Credit= Merchandise Inventory 21 Instead the business will record the transaction i the cash payments journal. The entry will be recorded by entering the 679 in the cash CR column. The accounts payable DR column will be recorded for 700, and the discount of 21 will bet entered into merchandise inventory CR column. All transactions involving cash payments are recorded in the cash payments journal.

Owner Withdrew 6,000 from business.

Cash Payments. When money comes out of business. Involves, cash, did the company receive cash? -No. Record in cash payments journal.

Anytime money goes out of business?

Cash Payments

Received credit veto for damaged merchandise

General Journal Does the transactions involve cash?-No Is the transaction a sale on account- No Is the transaction a purchase on account?-No Record in General Journal- No

Bought supplies on account.

Purchases- Purchases on account are recorded in the purchases journal, which includes an accounts payable CR column and various other debit columns.

Bought car payed next month?

Purchases. Anything on credit is purchases. Is the transaction a sale on account?-Yes. Purchases journal.

Did the transaction involve cash? No Is the transaction a sale on account? No Is the transaction a purchase on account? No

Record in General Journal Issued credit memo to M.O Samson for 900 for merchandisei inventory returned by Samson. Also accounted for receipt of the merchandise at cost.

Did the transaction involve cash? No Is the transaction a sale on account? No Is the transaction a purchase on account? yes

Record in Purchases journal: Purchased office supplies on account from Marszalek inc 400. Terms were n/EOM- Purchases- Purchases. - Purchases merchandise invenotry on credit terms of net 30 from Saari Distributing 2,350.- Purchases Journal - Purchases merchandise invenotry on credit terms of 2/10, n/30 from Marszalek inc. 600- Purchases journal.

Did the transaction involve cash? No Is the transaction a sale on account? Yes

Record in sales journal: Issued invoice no 914. for sales on account to buddy co. 5,400 (cost 2,600)- Sales Sold Merchandise inventory on account to M.O Samson, issuing invoice no.915 for $900 (cost $300).- Sales Issued invoice no. 916 for credit sale no.916 for credit sale K.D. keratin 600 (cost, 100).- Sales journal - Sold merchandise inventory on account to Burleson co issuing invoice no 917 for 3,300 (cost 1,200)- Sales journal.

Did the transaction involve cash? Yes Did the company receive cash? No

Records in Cash payments journal Issued check no 532 to purchase furniture for cash 2,550- Cash payments - Purchased merchandise inventory for cash, 1,250 sussing check no.533- cash payments - Issued check no.534 to pay Habile Co. the net amount owed from May 3- cash payments - Issued check no 538 to pay monthly salaries of 2,050.- Cash payments

Did the transaction involve cash? Yes Did the company receive cash? Yes

Records in cash receipts journal Sold Merchandise inventory for cash, 1,500 (cost 650)- Cash Receipts Collected interest revenue of 1,450- cash receipts -Received cash from K>D keratin in full settlement of her account receivable from the sale on May 5.- cash receipts - Received $5,404 from Burleson Co. in full settlement of tis account receivable from May 9. Burleson earned a discount by paying early- Cash Receipts -Received $5,292 from Burleson Co. in full settlement of its account receivable from May 9. Burleson earned a discount by paying early.- Cash receipts -Received has in full from K.D keratin on credit sales of May 18. There was o discount- Cash receipts

1. Sales Journal

Sales Journal- special journal used to record credit sales. Most merchandisers seller merchandise inventory on account. These credit sales are entered in the sales journal. The sales journal used used when recording the sale of merchandise inventory on account. (The sales of merchandise inventory for cash is not recorded in the sales journal, but instead it is recorded in the cash receipts journal.)

Finished tax return and hoped to get paid next week

Sales. Does the transaction involve cash?- No, Is the transaction a sales on account?- Yes Record in sales journal.

5. The General Journal-

The General Journal- special journals save time recording receptive transactions. But some transaction don't fit a special journal. Examples include the adjusting entries for depreciation, the expiration of prepaid insurance, and the accrual of salaries payable at the end of the period. Companies also ouse the general koruna for sales returns and allowances and purchase returns and allowances. All accounting information systems need a general journal. The adjusting entries and the closing entries are recorded in the general journal, along with other non routine transactions. - As we have seen, a manaul accounting information system involves five journals: 1. Sales Journal 2. Cash Receipts Journal 3. Purchases journal 4. Cahs payments journal 5. general journals.

2. The cash Receipts Journal-

The cash Receipts Journal- Special journal used to record cash receipts. The cash receipts journal is a special journal that is used to record cash receipts. -The cash receipts journal includes a column for debits to cash The next column is for debits to sales discounts The main sources of cash are collections on account and cash sales Collections on account are recorded in the Accounts receivable CR Column and the cash DR column. Cash sales are recorded in the sales Revenue CR column, the Cash DR column and cost of goods sold DR, Merchandise inventory CR column. The cash receipts journal also has an other accounts CR column that is used to record miscellaneous cash receipt transactions Recording transaction- (Exhibit 7-5)- The first cash receipt occurred on novegebr 6 and was a cash sale for $517 (cost of goods sold, $290). if the transaction had been recorded in the general journal, the following entries would have been recorded: