LESSON 9-2
Journalizing Cash
Payments Using a Cash
Payments Journal
Original created by M.C. McLaughlin, Thomson/South-Western
Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School
CENTURY 21 ACCOUNTING © Thomson/South-Western
2
CASH PAYMENTS JOURNAL
page 242
A special journal used to record only cash payment
transactions is called a cash payments journal
The cash payments journal contains columns for general
journal transactions, accounts payable, purchases discount
and cash
A journal amount column that is not headed with an
account title is called a general amount column
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
3
CASH PAYMENT OF AN EXPENSE
page 243
November 2. Paid cash for advertising, $150.00. Check No. 292.
1
1.
2.
3.
4.
5.
2
3
4
5
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
4
BUYING SUPPLIES FOR CASH
page 243
November 5. Paid cash for office supplies, $94.00. Check No. 293.
1
1.
2.
3.
4.
5.
2
3
4
5
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
5
CASH PAYMENTS FOR PURCHASES
The retail price listed in a catalog or on an
Internet site is called a list price
A reduction in the list price granted to customers
is called a trade discount.
When a trade discount is granted, the seller’s
invoice shows the actual amount charged (less the
trade discount). The amount charged is the invoice
amount
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
6
CASH PAYMENTS FOR PURCHASES
page 244
November 7. Purchased merchandise for cash, $600.00. (Original
list price $1500 less a 60% trade discount.) Check No. 301.
2
1
1.
2.
3.
4.
5.
3
4
5
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
7
CASH PAYMENTS ON ACCOUNT WITH
PURCHASES DISCOUNTS
A deduction that a vendor allows on the invoice amount to
encourage prompt payment is called a cash discount
A cash discount on purchases taken by a customer is called a
purchases discount
An account that reduces a related account on a financial statement
is called a contra account
Purchases discount is a contra account to Purchases
The normal balance for contra accounts are opposite the normal
balances of their related accounts
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
8
CASH PAYMENTS ON ACCOUNT WITH
PURCHASES DISCOUNTS
A cash discount is stated as a percentage deducted from the nvoice
amount
2/10, n/30 – means 2% of the invoice amount may be deducted
if the invoice is paid within 10 days of the invoice
Purchases discounts are recorded in a general ledger account titled
Purchases Discount
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
9
CASH PAYMENTS ON ACCOUNT WITH
PURCHASES DISCOUNTS
November 8. Paid cash on account to Gulf Craft Supply, $488.04,
covering Purchase Invoice No. 82 for $498.00, less 2% discount,
$9.96. Check No. 302.
5
1
1.
2.
3.
4.
5.
6.
2
page 245
6
4
3
Write the date.
Write the account title of the vendor.
Write the check number.
Write the debit amount.
Write the credit amount.
Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
10
CASH PAYMENTS ON ACCOUNT
WITHOUT PURCHASES DISCOUNTS
page 246
November 13. Paid cash on account to American Paint, $2,650.00,
covering Purchase Invoice No. 77. Check No. 303.
1
2
4
5
3
1.
2.
3.
4.
5.
Write the date.
Write the vendor account title.
Write the check number.
Write the debit amount.
Write the credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2
11
TERMS REVIEW
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page 247
cash payments journal
cash discount
purchases discount
general amount column
list price
trade discount
contra account
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 9-2