Purchases Journal - the purchases journal may not have an...

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Purchases Journal All purchases of merchandise on account are recorded in the purchases journal . Each entry in this journal results in a debit to Merchandise Inventory and a credit to Accounts Payable. When a one-column purchases journal is used (as in Illustration G-12, page G-11), other types of purchases on account and cash purchases cannot be journalized in it. For example, credit purchases of equipment or supplies must be recorded in the general journal. Likewise, all cash purchases are entered in the cash payments journal. As illustrated later, where credit purchases for items other than merchandise are numerous, the purchases journal is often expanded to a multi-column format. JOURNALIZING CREDIT PURCHASES OF MERCHANDISE Entries in the purchases journal are made from purchase invoices. The journalizing procedure is similar to that for a sales journal. In contrast to the sales journal,
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Unformatted text preview: the purchases journal may not have an invoice number column, because invoices received from different suppliers will not be in numerical sequence. To assure that all purchase invoices are recorded, some companies consecutively number each invoice upon receipt and then use an internal document number column in the purchases journal. Karns Wholesale Supply made the assumed credit purchases shown in Illustration G-11. POSTING THE PURCHASES JOURNAL The procedures for posting the purchases journal are similar to those for the sales journal. In this case, postings are made daily to the accounts payable ledger and monthly to Merchandise Inventory and Accounts Payable in the general ledger. In both ledgers, P1 is used in the reference column to show that the postings are from page 1 of the purchases journal....
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 201 taught by Professor - during the Spring '11 term at Montgomery.

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