century 21 accounting © thomson/south-western lesson 1-2 journalizing and posting purchases and...
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CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 1-2LESSON 1-2
Journalizing and Posting Purchases and Purchases Returns
CENTURY 21 ACCOUNTING © Thomson/South-Western
DEPARTMENTAL ACCOUNTING SYSTEMDEPARTMENTAL 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
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LESSON 1-2
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 1-2
June 1. Purchased video equipment on account from Western Digital Systems, $845.00. Purchase Invoice No. 336.
JOURNALIZING JOURNALIZING PURCHASES ON ACCOUNTPURCHASES ON ACCOUNT
1. Write approval date.
4. Write invoice amount.
3. Record invoice number.
2. Write vendor name.
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CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 1-2
1. Write the date.
5. Write vendor number.
4. Calculate new account balance.
3. Record the credit amount.
2. Write journal page number.
POSTING FROM A POSTING FROM A PURCHASES JOURNALPURCHASES JOURNAL page 14
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LESSON 1-2
4. Calculate new account balance.
3. Write column total.
2. Write journal page number.
POSTING THE TOTALS OF A POSTING THE TOTALS OF A PURCHASES JOURNALPURCHASES JOURNAL page 15
1. Write the date.
5. Write account number.
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LESSON 9-4
DEBIT MEMORANDUM FOR PURCHASES DEBIT MEMORANDUM FOR PURCHASES RETURNS AND ALLOWANCESRETURNS 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
CENTURY 21 ACCOUNTING © Thomson/South-Western
PURCHASE RETURNS & ALLOWANCESPURCHASE RETURNS & ALLOWANCES
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LESSON 1-2
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 statementPurchases discount is a contra cost account
It is part of the Cost of Goods Sold section of the income statement
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 1-2
2. Enter accounts to be debited.
3. Record debit memo number.
JOURNALIZING PURCHASES JOURNALIZING PURCHASES RETURNS AND ALLOWANCESRETURNS AND ALLOWANCES page 16
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1. Write the date.
4. Draw diagonal line.
5. Write debit amount.
7. Write credit amount.
6. Enter account to be credited.
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LESSON 1-2
TERMS REVIEWTERMS REVIEW
departmental accounting system merchandising business posting debit memorandum contra account
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