– Using Purchases and Cash Payments Lesson Plan 5.1 Journals Course Title

Lesson Plan 5.1

– Using Purchases and Cash Payments

Journals

Course Title – Accounting I

Session Title – Using Purchases and Cash Payments Journals

Lesson Purpose – Demonstrate skill in analyzing and journalizing purchases and cash payments for a merchandising business.

Behavioral Objectives



Identify terms related to accounting purchases and cash payments for a merchandising business.



Contrast differences between a service business and a merchandising business.



Analyze and journalize transactions related to a merchandising business using Purchases and Cash Payments journal.



Analyze and journalize transactions related to purchases and cash payments in a general journal.

Preparation

OLD TEKS Correlations:

This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed.

120.42.C

2.a

.

contrast the characteristics of a service and a merchandising business;

2.b. analyze transactions relating to purchase and sale of merchandise;

2.c. record transactions in special journals;

7.a. follow oral and written instructions;

7.b. develop time management skills by setting priorities for completing work as scheduled

7.c. make decisions using appropriate accounting concepts;

7.e. perform accounting procedures using manual and automated

2010 TEKS Correlations:


130.166.C

3.f. – record transactions in a general journal;

5. The student performs accounting functions specific for a merchandising business. The student is expected to explain the nature of special journals and recording transactions in special journals.

6.b. – analyze purchase transactions

Lesson 5.1 – Using Purchases and

Cash Payments Journals

Copyright © Texas Education Agency, 2011. All rights reserved.

ACCOUNTING 1

methods;

7.g. demonstrate use of the numeric keypad by touch

TAKS Correlation:

WRITING

Objective 6 : The student will demonstrate the ability to revise and proofread to improve the clarity and effectiveness of a piece of writing.

MATH

Objective 10 : The student will demonstrate an understanding of the mathematical processes and tools used in problem solving.

Materials, Equipment and Resources:



Textbook



Internet



Accounting Software

Teaching Strategies:



Observation



Demonstration

Learner Preparation:

In teams, have students write down all the characteristics they can think of for a service business on one side of a flip tablet or butcher paper. On the other side, ask your students to read their textbook and/or do research to find some attributes of a merchandising business. Contrast how they are alike and different. Post the butcher paper on the walls and ask for presentations from each team.

Start a store in the classroom for your students to keep up with during the unit.

Check on the store’s progress as a daily routine. Start the store small by having it carry only pens, pencils, highlighters, and erasers. Have each student keep a spreadsheet of the inventory and update that inventory at the end of the week.

Keep a spreadsheet of an analysis of the net income or net loss. Ask each student to create a flyer to market the store. Have the class decide on a store name to use on the flyer and prices for each item, based on the cost of the item.

Lesson Content:

This lesson introduces a merchandising business and its characteristics as well as what constitutes a partnership. It covers terminology related to a merchandising business as well as analyzing and journalizing purchases, cash




ACCOUNTING 1

payments, sales and cash receipts for special journals. Students analyze and journalize other transactions for a general journal. The lesson covers the end-offiscal period work for a merchandising business .

Assessment:



Observation



Graded Assignments




ACCOUNTING 1

Additional Resources:

Textbooks:

Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting Real-

World Applications and Connections.

Glencoe McGraw-Hill, 2000.

ISBN/ISSN 0-02-815004-X.

Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting

Multicolumn Journal Anniversary Edition , 1st Year Course. South-

Western Educational and Professional Publishing, 2003.

ISBN/ISSN: 0-538-43524-0.

Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General

Journal Accounting Anniversary Edition , 7th Edition. South-

Western Educational and Professional Publishing, 2003.

ISBN/ISSN: 0-538-43529-1.

Yacht, Carol. Southwestern Accounting with Peachtree. South-Western

Educational and Professional Publishing, 2003.

Multimedia:

Accounting I. Pearson Education, 2009. http://accounting1.ca/pages/demos/demo.html

.

Websites:

Lycos Help and How To. Lycos Inc., 2009. http://howto.lycos.com/lycos/series/1,,10+54+89+23494,00.html

.

Taxes and Payroll, 2009 http://www.slideshare.net/DowD/taxes-and-payroll

Compiling Time Sheets. Lycos, Inc., 2002. Accessed 25 June 2003. http://howto.lycos.com/lycos/step/1,,6+35+26165+26381+22993,00

.html#top .

Mr. Cohen Online http://mrcohenonline.com/index_files/Lessons/AI/80_13-

3/Accounting_I_13-3_80.ppt#279,5,PAYROLL REGISTER

Mt. Nebo Accounting Simulation. Carl Lyman, 2009. http://www.lymansite.net/Acct/MtNeboPumpkins/mtnebo.htm




ACCOUNTING 1

Activity 5.1.1

–Identifying Terms


Session Title – Accounting for a Merchandising Business

Activity Purpose – Identify terms associated with a merchandising business formed as a partnership.



120.42.C





130.166.C

5. The student performs accounting functions specific for a merchandising business. The student is expected to explain the nature of special journals and recording transactions in special journals.


WRITING

Objective 6: The student will demonstrate the ability to revise and proofread to improve the clarity and effectiveness of a piece of writing.




Textbook



Internet




Observation



Graded assignment

Activity Outline:

Have your students write the definition of these terms: discount period purchase order packing slip partnership purchase order purchases partner merchandising business wholesaler purchases discount special amount invoice

Activity 5.1.1

– Identifying Terms merchandise cost of merchandise purchase


ACCOUNTING 1

journal retailer column inventory sales invoice purchase requisition special journal terms of sale cost of merchandise markup cash payments journal vendor general amount column purchase on account correcting entry

Use a Purchases and Cash Payment Terms presentation to drill your students on their knowledge of the terms.

Assessment:



Observation



Quiz on Terms Associated With a Merchandising Business Formed as a Partnership

Activity 5.1.1

– Identifying Terms


ACCOUNTING 1

Q

UIZ ON TERMS ASSOCIATED WITH A MERCHANDISING

BUSINESS FORMED AS A PARTNERSHIP

1. purchase requisition

2. partnership

3. merchandise

4. vendor

5. markup

6. discount period

7. wholesaler

8. terms of sale

9. merchandising business

10. purchases journal

Activity 5.1.1

– Identifying Terms


ACCOUNTING 1

Activity 5.1.2 – Journalizing Purchases on Account



Activity Purpose – Demonstrate skill in analyzing and journalizing transactions in the purchases journal.



120.42.C





7.c

. make decisions using appropriate accounting concepts;

7.e. perform accounting procedures using manual and automated methods;




130.166.C


N/A




Textbook



Accounting Software




Observation



Graded assignment

Activity 5.1.2

– Journalizing Purchases on Account


ACCOUNTING 1

Assessment:



Observation



Graded Assignment

Quality Feature

Enters chart of accounts with no errors in names or balances

Enters subsidiary ledgers appropriately

Problem set up on the computer without error

Transactions correctly analyzed using the entry form

Purchases journal total correct

Completes in a timely manner

Score

Activity 5.1.2



ACCOUNTING 1


Using accounting software, have your students create this chart of accounts for a merchandising business formed as a partnership.

CDs Galore

Chart of Accounts

(1000) Assets

1110 Cash

1120 Petty Cash

1130 Accounts Receivable

1140 Merchandise Inventory

1150 Supplies —Office

1160 Supplies--Store

1170 Prepaid Insurance

(2000) Liabilities

2110 Accounts Payable

2120 Employee Income Tax Payable

2130 FICA Tax Payable

2140 Sales Tax Payable

2150 Unemployment Tax Pay —Fed.

2160 Unemployment Tax Pay —State

2170 Health Insurance Prem. Payable

(3000) Owner’s Equity

3110 Sam Browning, Capital

3120 Sam Browning, Drawing

3130 Pam Browning, Capital

3140 Pam Browning, Drawing

3150 Income Summary

4110 Sales

(4000) Revenue

4120 Sales Returns and Allowances

(5000)

Cost of Merchandise

5110 Purchases

5120 Purchases Returns and

Allowances

5130 Purchases Discount

(6000)

Operating Expenses

6110 Advertising Expense

6120 Credit Card Fee Expense

6130 Insurance Expense

6140 Miscellaneous Expense

6150 Payroll Taxes Expense

6160 Rent Expense

6170 Salary Expense

6180 Supplies Expense —Office

6190 Supplies Expense —Store

6195 Utilities Expense

Balance

$5,600.00

50.00

1,203.00

10,000.00

550.00

975.00

600.00

5,030.00

210.00

275.00

525.00

44.00

128.00

1,200.00

5,783.00

5,783.00

Activity 5.1.2



ACCOUNTING 1

Enter the following accounts to the subsidiary ledgers. Sometimes subsidiary ledgers have a code for each account and sometimes a number. Both are listed. Have them use the one your software requires.

Accounts Receivable Balance

110 BAK Baker, Sandra

120 CUL Cullins, George

130 FAU Faucette, Frank

140 TAM Tammerson, Tom

Accounts Payable

45.00 210 CHA Bosse Office Supply

23.00 220 ELE Ltd Music

0 230 GAR Merry Music

0 240 MON Super Music

250 WAS Taylor Music

Balance

0

95.00

22.50

18.50

0

Ask your students to analyze these transactions into a Purchases Journal

Input Form spreadsheet and then journalize using their accounting software.

2XXX

Oct

Transaction

1 Purchased merchandise from Ltd Music, $590.00, P31

4 Purchased merchandise from Merry Music, $1,250.00, P32

4 Purchased merchandise from Ltd. Music, $730.00, P33

6 Purchased merchandise from Super Music, $999.00, P34

12 Purchased merchandise from Ltd Music, $12.00, P35

16 Purchased merchandise from Taylor Music, $414.00, P36

20 Purchased merchandise from Super Music, $420.00, P37

24 Purchased merchandise from Taylor Music, $1,008.00, P38

26 Purchased merchandise from Super Music, $1,402.00, P39

30 Purchased merchandise from Ltd. Music, $437.00, P40

Activity 5.1.2



ACCOUNTING 1

Activity 5.1.3 – Journalizing Cash Payments



Activity Purpose – Demonstrate skill in journalizing cash payment transactions into a special journal



120.42.C





7.c



7.g

. demonstrate use of the numeric keypad by touch




130.166.C

6.b.

- analyze purchase transactions

WRITING

Objective 6: The student will produce a piece of writing that demonstrates a command of the conventions os spelling, capitalization, punctuation, grammar, usage, and sentence structure.

MATH

Objective 10: The student will demonstrate an understanding of the mathematical processes and tools used in problem solving.




Textbook



Accounting software

Activity 5.1.3

– Journalizing Cash Payments


ACCOUNTING 1




Observation



Demonstration


Demonstrate these cash payments transactions in a Cash Payments Journal Input

Form spreadsheet.

2XXX

Oct 1 Paid cash for rent, $720.00, C401

1 Paid cash for Office Supplies, $220.00, C402

2

2

Paid cash for store supplies, $105.00, C403

Sam Browning withdrew cash for personal use, $1,000, C404

3

4

4

Pam Browning withdrew cash for personal use, $1,000, C405

Paid cash for merchandise, $599.00, P21

Paid cash to the local newspaper for advertising, $200.00, C406

5

6

Paid cash to replenish the petty cash fund, $32.00, Office

Supplies, $9.00; Advertising, $9.00, C407

Paid cash on account to Ltd. Music, $95.00, C408

6

13

15

Purchased merchandise for cash, $500.00, C408

Paid cash on account to Super Music, $18.50, C409

Paid cash for electric bill, $221.00, C410

16

17

Paid cash on account to Merry Music, $22.50, C411


18 Paid cash for salaries, $489.00 (FIT Tax $52.00, FICA Tax

$42.00), C413

20

22

Paid cash on account to Bosse Office Supply, $95.00, C414

Paid cash for insurance, $600.00, C415.

24

25

Paid cash to a local radio station for advertising, $440.00, C415


30 Paid cash on account to Taylor Music, $980.00, C417

Assessment:



Observation



Graded Assignment

Quality Feature

All cash payments transactions analyzed correctly on the input form

No errors in entry of accounts or amounts

Correct totals on cash payments journal


Score

Activity 5.1.3



ACCOUNTING 1

Activity 5.1.3



ACCOUNTING 1

Activity 5.1.4 – General Journal Transactions



Activity Purpose – Demonstrate skill in journalizing transactions into the general journal that do not fit in special journals



120.42.C




7.c



7.g

. demonstrate use of the numeric keypad by touch




130.166.C


WRITING 6: The student will demonstrate the ability to revise and proofread to improve the clarity and effectiveness of a piece of writing.

MATH

Objective 10: The student will demonstrate an understanding of the mathematical processes and tools used in problem solving.




Textbook



Accounting software




Observation



Demonstration

Activity 5.1.4

– General Journal Transactions


ACCOUNTING 1


Demonstrate these types of transactions, which do not belong in either the purchases or cash payments journal.



Discovered errors that need to be corrected.



Bought supplies on account.



Owner withdrew merchandise for personal use.

Have students prepare a General Journal Input Form spreadsheet for these transactions:

Transaction

2XXX

Oct. 1 Office Supplies bought for cash were journalized and posted in error as a debit to Prepaid Insurance instead of supplies, $30.00,

M31

4

5

Bought Supplies on account from Bosse Office Supply, $21.00,

M32

Pam Browning withdrew merchandise for personal use, $130.00,

M33

9

15

20

25

Found an error that a check written for advertising was journalized and posted in error as a debit to Purchases instead of Advertising Expense, $400.00, M34

Sam Browning withdrew merchandise for personal use, $13.00,

M35

Bought Store Supplies on account from Bosse Office Supply,

$225.00, M36

Found an error that had Debited Office Supplies instead of

Purchases for $52.00, M37

Assessment:



Observation



Graded Assignment

Quality Feature

Transactions analyzed without error

Correct totals on general journal input form

The general journal entry includes all details

Computer report of general journal matches the total on the general journal input form


Score

Activity 5.1.4

– General Journal Transactions


ACCOUNTING 1

– Using Purchases and Cash Payments Lesson Plan 5.1 Journals Course Title

Lesson Plan 5.1

– Using Purchases and Cash Payments

Journals

Activity 5.1.1

–Identifying Terms

Q

UIZ ON TERMS ASSOCIATED WITH A MERCHANDISING

BUSINESS FORMED AS A PARTNERSHIP

Activity 5.1.2 – Journalizing Purchases on Account

Activity 5.1.3 – Journalizing Cash Payments

Activity 5.1.4 – General Journal Transactions

Related documents

Products

Support

– Using Purchases and Cash Payments Lesson Plan 5.1 Journals Course Title

Lesson Plan 5.1