LESSON
Learning Objectives
1-2
Journalizing and
Posting
Purchases and
Purchases Returns
LO3 Explain the purpose of a departmental
accounting system.
LO4 Journalize departmental purchases of
merchandise on account using a purchases
journal.
LO5 Post merchandise purchases to an accounts
payable ledger and a general ledger.
LO6 Journalize departmental purchases returns
and allowances.
© 2015 Cengage Learning. All Rights Reserved.
Lesson 1-2
Departmental Accounting System
LO3
● An accounting system showing accounting
information for two or more departments is
called a departmental accounting system.
● A business that purchases and sells goods is
called a merchandising business.
● All departmental purchases of merchandise on
account are recorded in a purchases journal
and can be traced to a purchase invoice.
© 2015 Cengage Learning. All Rights Reserved.
SLIDE 2
Lesson 1-2
Journalizing Purchases on Account
LO4
May 1.
Purchased
furniture on
account from
Backyard
Furniture Mfg.,
$1,869.35.
Purchase Invoice
No. 675.
1
2
Approval
Date
Vendor
Name
3
Invoice
Number
4
Invoice
Amount
© 2015 Cengage Learning. All Rights Reserved.
5
Sales
Department
SLIDE 3
Lesson 1-2
Posting the Totals of a Purchases Journal
Journal Page
Number
Date
LO5
5
2
3 Column Total
1
Account
Number
Account Balance
© 2015 Cengage Learning. All Rights Reserved.
4
SLIDE 4
Lesson 1-2
Journalizing Purchase Returns and Allowances
• When merchandise is returned to a vendor, the vendor’s
LO6
account and Accounts Payable are reduced by a debit.
Purchases Returns
and Allowances is a
contra account to the
purchases account.
An account
that reduces a
related account
on a financial
statement is
called a contra
account.
© 2015 Cengage Learning. All Rights Reserved.
SLIDE 5
Lesson 1-2
Debit Memorandum
LO6
● A form prepared by the customer showing the price
deduction taken by the customer for a return or an allowance
is called a debit memorandum.
© 2015 Cengage Learning. All Rights Reserved.
SLIDE 6
Lesson 1-2
Lesson 1-2 Audit Your Understanding
1.
When Whiley’s grills department
purchases merchandise on account, which
general ledger accounts are affected, and
how?
ANSWER
Purchases—Grills is debited; Accounts
Payable is credited.
© 2015 Cengage Learning. All Rights Reserved.
SLIDE 7
Lesson 1-2
Lesson 1-2 Audit Your Understanding
2.
Which general ledger accounts are
affected, and how, by a return of furniture
department merchandise?
ANSWER
Accounts Payable is debited; Purchases
Returns and Allowances—Furniture is
credited.
© 2015 Cengage Learning. All Rights Reserved.