LESSON 9 1 Journalizing Purchases Using a Purchases

LESSON 9 -1 Journalizing Purchases Using a Purchases Journal CENTURY 21 ACCOUNTING © Thomson/South-Western

9 -1: Journalizing Purchases Using a Purchases Journal Mr. Stasa – WE City Schools http: //northbiz. weebly. com http: //www. twitter. com/@north_biz CENTURY 21 ACCOUNTING © Thomson/South-Western

3 Merchandising Business n Chapters 9 and beyond will now deal with merchandising businesses. n A merchandising business purchases goods to sell n Merchandise is the goods (tangible items) that a business purchases to sell n Types of merchandising business are: n Retail business (sells directly to customers who consume the merchandise) n Wholesale business (sells retail directly to other businesses) CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

4 Where Are We At Now? D L O n Chapters 1 -8 n Sole Proprietorship n Service Business CENTURY 21 ACCOUNTING © Thomson/South-Western NEW n Chapters 9 -16 n Corporation n Merchandise Business LESSON 9 -1

5 Proprietorship vs. Corporation n A proprietorship is a business owned by just one owner n A corporation is owned by many people n A unit of ownership in a corporation is a share of stock n An owner of one or more shares of a corporation is a stockholder. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

6 Special Journal n A business who has a limited amount of transactions (small business) can record all transactions in one general journal n A business who has multiple transactions may choose to use a separate journal to record each type of transaction called a special journal n Examples include n Purchases journal n Cash payments journal n Sales journal n Cash receipts journal n General Journal CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

7 Purchasing Merchandise n The price a business pays for goods it purchases is called the cost of merchandise M prod erchand from ucts we ise are t he m a to se wholesa ust buy fi le ll to our r (or ve rst cu nd reta stomers or) il. as n In order to make a profit, a business must charge customers more money than it cost to purchase the merchandise (mdse), this is called a markup price n Revenue includes the cost of merchandise and the markup price. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

8 There Are Two Ways To Purchase MDSE 1. Purchase MDSE with cash 2. Purchase MDSE on account Cash CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

9 There Are Two Ways To Purchase MDSE 1. Purchase MDSE with cash 2. Purchase MDSE on account CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

10 PURCHASES JOURNAL CENTURY 21 ACCOUNTING © Thomson/South-Western page 237 LESSON 9 -1

11 PURCHASING MERCHANDISE ON ACCOUNT page 239 November 2. Purchased merchandise on account from Crown Distributing, $2, 039. 00. Purchase Invoice No. 83. 2 1 1. 2. 3. 4. 3 4 Write the date. Write the vendor name. Write the purchase invoice number. Write the amount of the invoice. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1

12 TOTALING AND RULING A PURCHASES JOURNAL page 240 1 2 3 1. Rule a single line across the amount column. 2. Write the date. 3. Write the word Total. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 4. Add the amount column. 5. Write the total. 6. Rule double lines across the amount column. 5 6 LESSON 9 -1

13 9 -1 Work Together (Page 241) CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 9 -1