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Efficient Cash Payments Journal Entries for Various Transactions

Learn to journalize cash payments for purchases, expenses, and discounts effectively using a cash payments journal. Understand the process step by step with practical examples and detailed explanations. Improve your accounting skills with hands-on practice.

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Efficient Cash Payments Journal Entries for Various Transactions

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  1. LESSON 9-2 Journalizing Cash Payments Using a Cash Payments Journal

  2. PURCHASES JOURNAL page 237 REVIEW LESSON 9-1

  3. PURCHASING MERCHANDISE ON ACCOUNT page 239 November 2. Purchased merchandise on account from Crown Distributing, $2,039.00. Purchase Invoice No. 83. 2 1 3 4 REVIEW 1. Write the date. 2. Write the vendor name. 3. Write the purchase invoice number. 4. Write the amount of the invoice. LESSON 9-1

  4. CASH PAYMENTS JOURNAL page 242 The cash payments journal is used only for cash payment transactions. Special amount columns include: • Accounts Payable dr. • Purchases Discount cr. • Cash cr. LESSON 9-2

  5. CASH PAYMENT OF AN EXPENSE page 243 November 2. Paid cashfor advertising, $150.00. Check No. 292. 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  6. BUYING SUPPLIES FOR CASH page 243 November 5. Paid cash for office supplies, $94.00. Check No. 293. 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  7. CASH PAYMENTS FOR PURCHASES page 244 November 7. Purchased merchandise for cash, $600.00. Check No. 301. 1. Write the date. 2. Write the account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  8. Discounts • To encourage early payment, a vendor may allow a cash discount on the invoice amount. • A cash discount on purchases taken by a customer is a purchases discount. The customer pays less than the invoice amount. • A reduction in the invoice list price granted to a customer is a trade discount. LESSON 9-2

  9. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS page 245 November 8. Paid cashon account to Gulf Craft Supply, $488.04, covering Purchase Invoice No. 82 for $498.00, less 2% discount, $9.96. Check No. 302. Pre-Discount Post-Discount 1. Write the date. 2. Write the account title of the vendor. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. 6. Write the credit amount. LESSON 9-2

  10. CASH PAYMENTS ON ACCOUNT WITH PURCHASES DISCOUNTS page 246 November 13. Paid cashon account to American Paint, $2,650.00, covering Purchase Invoice No. 77. Check No. 303. 1. Write the date. 2. Write the vendor account title. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 9-2

  11. 2/10 means that 2% of the invoice amount may be deducted if paid within 10 days • n/30 means the total invoice amount must be paid within 30 days. LESSON 9-2

  12. 9-2 Work Together LESSON 9-2

  13. 9-2 OYO • Nov 2: Paid cash for the electric bill, $248.00. C432 • Nov 6: Paid cash for office supplies, $142.00. C433 • Nov 9: Paid cash to Zebra Metals for merchandise with a list price of $3,400.00, less a 40% trade discount. C434 • Nov 12: Paid cash on account to Racing Images covering Purchase Invoice No. 543 for $4,230.00, less 2% discount. C435 • Paid cash on account to SPL, Renovation covering Purchase Invoice No. 182 for $2,573.00. No cash discount was offered. C436 LESSON 9-2

  14. 9-2 Application Answers • Nov 1: Paid cash for telephone bill, $96.00. C241 • Nov 4: Paid cash on account to The Pro Shop $1,250.00 covering P367, less 2% discount. C242. • Nov 6: Paid cash for advertising $75.00. C243 • Nov 9: Paid cash on account to Athletic Center, $925.00 covering P362. No cash discount was offered. C244 • Nov 11: Paid cash for office supplies $125.00. C247 LESSON 9-2

  15. 9-2 Appl. Cont. • Nov 13: Paid cash to Tennis City for merchandise with list price of $1,850.00 less a 50% trade discount. C246. • Nov 18: Paid cash for store supplies, $135.00. C247 • Nov 21: Purchased merchandise fir cash from Trevor Industries $250.00. C248 • Nov 23: Purchased merchandise for cash from Paris Mfg. Co. $750,00 less a 60% trade discount. C249 • Nov 25: Paid cash on account to Best Clothing $925.00 covering P363. No cash discount was offered. C250 • Nov 27: Paid cash on account to Trophy Sports $2,100 covering P373, less 2% discount. C251 LESSON 9-2

  16. Sept 4. Paid cash on account to The Pro Shop, $1,250.00, covering P367, less 2% discount. C242. 4 1 250 00 25 00 242 The Pro Shop 1 225 00 $1,250.00 X 0.02 = $25.00 $1,250.00 - $25.00 = $1,225.00

  17. Sept. 13. Paid cash to Tennis City for merchandise with a list price of $1,850.00, less a 50% trade discount. C246. 925 00 Purchases 246 925 00 13 $1,850.00 X 0.50 = 925.00

  18. Sept. 21. Purchased merchandise for cash from Trevor Industries, $250.00. C248 250 00 Purchases 248 250 00 21

  19. Sept 27. Paid cash on account to Trophy Sports, $2,100.00 covering P373, less 2% discount. C251 27 2 100 00 42 00 251 Trophy Sports 2 058 00 $2,100.00 X 0.02 = $42.00 $2,100.00 - $42.00 = $2,058.00

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