Purchase journal Purchase journal refers to the journal that is used to record all purchases on account. In the purchase journal, all purchase transactions are recorded only when the business purchased the goods on account. For example, the business purchased cleaning supplies on account. General Ledger General ledger refers to the ledger that records all the transactions of the business related to the company’s assets, liabilities, owners’ equities, revenues and expenses. Each subsidiary ledger is represented in the general ledger by summarizing the account. Subsidiary ledger Subsidiary ledger refers to the ledger that provides the detailed information of the account already recorded in the general ledger such as accounts receivable subsidiary ledger and accounts payable subsidiary ledger. To identify: The postings to be done in (1) General ledger accounts or (2) Subsidiary ledger accounts or (3) No posting is required.
Purchase journal Purchase journal refers to the journal that is used to record all purchases on account. In the purchase journal, all purchase transactions are recorded only when the business purchased the goods on account. For example, the business purchased cleaning supplies on account. General Ledger General ledger refers to the ledger that records all the transactions of the business related to the company’s assets, liabilities, owners’ equities, revenues and expenses. Each subsidiary ledger is represented in the general ledger by summarizing the account. Subsidiary ledger Subsidiary ledger refers to the ledger that provides the detailed information of the account already recorded in the general ledger such as accounts receivable subsidiary ledger and accounts payable subsidiary ledger. To identify: The postings to be done in (1) General ledger accounts or (2) Subsidiary ledger accounts or (3) No posting is required.
Solution Summary: The author explains that purchase journal is used to record all purchases on account. General Ledger records all the transactions of the business related to the company’s assets, liabilities, owners’ equities, revenues and expenses.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
Chapter 5, Problem 5.11EX
To determine
Purchase journal
Purchase journal refers to the journal that is used to record all purchases on account. In the purchase journal, all purchase transactions are recorded only when the business purchased the goods on account. For example, the business purchased cleaning supplies on account.
General Ledger
General ledger refers to the ledger that records all the transactions of the business related to the company’s assets, liabilities, owners’ equities, revenues and expenses. Each subsidiary ledger is represented in the general ledger by summarizing the account.
Subsidiary ledger
Subsidiary ledger refers to the ledger that provides the detailed information of the account already recorded in the general ledger such as accounts receivable subsidiary ledger and accounts payable subsidiary ledger.
To identify: The postings to be done in (1) General ledger accounts or (2) Subsidiary ledger accounts or (3) No posting is required.
Identify Postings from Purchases Journal
Using the following purchases journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that no posting is required:
PURCHASES JOURNAL
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Date
Account Credited
Post.Ref.
AccountsPayableCr.
StoreSuppliesDr.
OfficeSuppliesDr.
OtherAccountsDr.
Post.Ref.
Amount
20Y9
Jan. 4
Coastal Equipment Co.
(a)
5,325
Warehouse Equipment
(g)
5,325
Jan. 6
Arrow Supply Co.
(b)
4,000
4,000
Jan. 9
Valley Products
(c)
1,875
1,600
275
Jan. 14
Office Warehouse
(d)
2,200
Office Equipment
(h)
2,200
Jan. 20
Office Warehouse
(e)
6,000
Store Equipment
(i)
6,000
Jan. 25
Metro Supply Co.
(f)
2,740
2,740
Jan. 30
22,140
4,340
4,275
13,525
(j)
(k)
(l)
(m)
Post reference represents:
a.
b.
c.…
Describe and use the purchase journal. What steps are followed in posting from the purchases journal to the accounts payable ledger?
Which of the following documents will only be used for internal purposes?
O Deposit Slip
Bill of Lading
Purchase Order
Purchase Requisition
A voucher is prepared before what transaction?
Paying
O Ordering
Receiving
O Requesting