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Recording Purchases and Cash Payments Using Special Journals

Review of general ledgers, introduction of a corporation and how it is set up. Introduction of special journals - Purchases Journal, Sales Journal, Cash Payment Journal, Cash Receipt Journal. Introduction of journalizing entries for purchasing on account using a purchases journal and posting from a purchase journal to an A/P ledger and General ledger. Introduction of journalizing entries for cash payments using a cash payments journal and posting from a cash payments journal to an A/P ledger and a General ledger. Review transactions used on a General Journal such as: journalizing purchase returns and allowances, buying supplies on account then posting the entries from the general journal to each separate general ledger account.
Review of preparing a schedule of A/P.

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A	B
Corporation	An organization with the legal rights of a person and which may be owned by many persons
Share of stock	Each unit of ownership in a corporation
Capitol stock	Total shares of ownership in a corporation
Special journal	A journal used to record only one kind of transaction
Purchases journal	A special journal used to record only purchase on account transaction
Cash payment journal	A special journal used to record only cash payment transactions
List price	A business’ printed or catalog price
Trade discount	A reduction in the list price granted to customers
Cash discount	A deduction that a vendor allows on the invoice amount to encourage prompt payment
Purchases discount	A cash discount on purchases taken by a customer
Cash short	A petty cash on hand amount that is less than a recorded amount
Cash over	A petty cash on hand amount that is more than a recorded amount
General journal	A journal with two amount columns in which all kinds of entries can be recorded
Purchases return	Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s accounts payable
Purchases allowance	Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s accounts payable