1 / 9

LESSON 1-2

LESSON 1-2. Journalizing and Posting Purchases and Purchases Returns. DEPARTMENTAL ACCOUNTING SYSTEM. Merchandising Business – a business that purchases and sells goods Departmental Accounting System – an accounting system showing accounting information for two or more departments

dorischambers
Download Presentation

LESSON 1-2

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. LESSON 1-2 Journalizing and Posting Purchases and Purchases Returns

  2. DEPARTMENTAL ACCOUNTING SYSTEM • Merchandising Business – a business that purchases and sells goods • Departmental Accounting System – an accounting system showing accounting information for two or more departments • Departmental accounting information can help management decide whether a department’s performance is acceptable or not. • Departmental Purchases on account – recorded in purchases journal. • Differences in departmental accounting: • Each purchase invoice has a notation placed on it showing to which department the purchase applies • Each department has a separate Purchases debit column in the purchases journal LESSON 1-2

  3. 1. Write approval date. 2 3 4 1 1 2 3 4 4 JOURNALIZING PURCHASES ON ACCOUNT page 13 June 1. Purchased video equipment on account from Western Digital Systems, $845.00. Purchase Invoice No. 336. 2. Write vendor name. 3. Record invoice number. 4. Write invoice amount. Departments LESSON 1-2

  4. 5 1 2 3 POSTING FROM A PURCHASES JOURNAL page 14 4 1. Write the date. 4. Calculate new account balance. 2. Write journal page number. 5. Write vendor number. 3. Record the credit amount. LESSON 1-2

  5. 2 3 1 5 4 POSTING THE TOTALS OF A PURCHASES JOURNAL page 15 1. Write the date. 4. Calculate new account balance. 2. Write journal page number. 5. Write account number. 3. Write column total. LESSON 1-2

  6. 6 DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCES page 256 • Customers may not want to keep merchandise that is inferior in quality or is damaged when received. • Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s accounts payable, is called a purchases return • When merchandise is damaged but still usable or is of different quality than that ordered, the vendor may let the customer keep the merchandise at a reduced price • Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s accounts payable, is called a purchases discount LESSON 9-4

  7. PURCHASE RETURNS & ALLOWANCES • When merchandise is returned to a vendor, the vendor’s account & Accounts Payable are reduced by a debit • Debit Memorandum – a form prepared by the customer showing the price deduction for purchase returns & allowances • Contra Account – an account that reduces a related account on a financial statement • Purchases discount is a contra cost account • It is part of the Cost of Goods Sold section of the income statement LESSON 1-2

  8. 3 2 1 7 5 2 3 1 JOURNALIZING PURCHASES RETURNS AND ALLOWANCES page 16 1. Write the date. 2. Enter accounts to be debited. 3. Record debit memo number. 4. Draw diagonal line. 5. Write debit amount. 6. Enter account to be credited. 7. Write credit amount. 4 6 LESSON 1-2

  9. TERMS REVIEW page 17 • departmental accounting system • merchandising business • posting • debit memorandum • contra account LESSON 1-2

More Related