Recording Transactions
Using a General Journal
General Journal
General Journal
A journal where all types of entries can be
recorded.
There are only two amount columns and used
when the business cannot attribute the account
to any of the special journals.
Purchases Returns and
Allowances
When a customer is unsatisfied with merchandise, they are
typically allowed to return part or all of their merchandise.
This type of transaction is a Purchases Return.
If the product is still usable or of lesser quality the vendor may
offer a decrease in the account payable.
This type of transaction is a Purchase Allowance
A debit memorandum is a document the customer creates to
identify the return or allowances.
DEBIT MEMORANDUM FOR PURCHASES
RETURNS AND ALLOWANCES
JOURNALIZING PURCHASES RETURNS
AND ALLOWANCES
March 8. Returned merchandise to Second Round, Inc. $143.00,
covering Purchase Invoice No. 230. Debit memorandum No. 78.
Accounts Affected
Classification
Accounts Payable
Liability
Purchases Returns and Allowances Contra cost
GENERAL LEDGER
Entered
Debit side
Credit side
ACCOUNTS PAYABLE LEDGER
Second Round, Inc.
Accounts Payable

Change
Increased
Increased
normal balance

143.00
Purchases Returns and Allowances

normal balance
143.00
normal balance
143.00
Bal.
(New Bal.
820.00
677.00)
JOURNALIZING PURCHASES RETURNS
AND ALLOWANCES
1
2
4
3
6
5
7
1. Write the date.
2. Write the account title and vendor name in the
Account Title column.
3. Place a diagonal line in the Post. Ref. column.
4. Write the debit memorandum number.
5. Write the debit amount.
6. Write the account title.
7. Write the credit amount.
Lesson 18-4, page 472
JOURNALIZING BUYING
SUPPLIES ON ACCOUNT
Because supplies are not merchandise, they would not be
recorded in the Purchase Journal, use the General Journal.
- March 9. Bought supplies on account from Winter Supplies,
$316.00. Memorandum No. 26.
Accounts Affected
Supplies
Accounts Payable
Classification
Asset
Liability
GENERAL LEDGER
Change
Increased
Increased
Entered
Debit side
Credit side
ACCOUNTS PAYABLE LEDGER
Winter Supplies
Supplies
normal balance
normal balance
 316.00

Accounts Payable

normal balance
316.00
316.00
JOURNALIZING BUYING SUPPLIES
ON ACCOUNT
4
2
3
1
5
6
1. Write the date.
2. Write the account title.
3.
3 Write the memorandum number.
4. Write the debit amount.
5. Write the account title and vendor name in the
Account Title column.
6. Place a diagonal line in the Post. Ref. column.
7. Write the credit amount.
7
Lesson 18-4, page 473
POSTING FROM
A GENERAL
JOURNAL
2
1. Date
2. Journal Page
Number
3. Credit
4. Account Balance
5. Account Numbers
1
3
5
4
4
Lesson 18-4, page 474