CHAPTER SIXTEEN
THE PURCHASES
JOURNAL
16-3
THE PURCHASES JOURNAL
Chapter Outcomes:
1. Record purchases of merchandise
on credit in a purchases journal.
2. Total, prove, and rule the
purchases journal.
3. Post from the purchases journal.
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Accounting Fundamentals, 7/e
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16-4
Recording Transactions in the
Purchases Journal
This special journal is used to record
only purchases of merchandise on
credit.
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Accounting Fundamentals, 7/e
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16-5
Advantages to using the Purchases
Journal
All entries for purchases of
merchandise on credit are grouped
in one place.
Important facts about each
transaction are written on a single
line
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Accounting Fundamentals, 7/e
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16-6
Advantages to using the Purchases
Journal (continued)
There is no need to enter account
titles or to write a long explanation
for each transaction.
The purchases journal allows for
great division of labor -- one person
can be put in charge of entering
purchases.
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Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
16-7
Posting From the Purchases Journal
Posting is simplified using the
purchases journal.
Money columns are pencil-footed
and the totals are posted to the
appropriate accounts.
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Accounting Fundamentals, 7/e
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16-8
Posting From the Purchases Journal
(continued)
The single posting to each account
saves time and reduces the
possibility of error.
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Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
16-9
Accounting Terminology
•Posting reference P
•Purchases journal
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16-10
Chapter Summary
• The purchases journal is a special
journal for recording purchases of
merchandise on credit.
• The information about each
transaction is taken from a purchase
invoice and is entered on a single
line of the purchases journal.
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Accounting Fundamentals, 7/e
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16-11
Chapter Summary (continued)
• The journal entry for each purchase
shows the date the invoice was
received, the supplier’s name, the
invoice number, the invoice date,
the credit terms, and the amount of
the purchase.
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Accounting Fundamentals, 7/e
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16-12
Chapter Summary (continued)
• At the end of each month, the figures
in the purchases journal are added.
The column totals are posted as a
debit to the Merchandise Purchases
account, a debit to the Freight In
account, and a credit to the Accounts
Payable account.
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Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
16-13
Investigating on the Internet
As a research assignment, access the
Krispy Kreme Doughnuts® web site and
report those sources of information that
might concern purchases of merchandise.
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Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
16-14
Topic Quiz
Answer the following true/false questions:
1. An advantage to the purchases journal
is the division of labor.
TRUE
2. Posting is simplified using a purchases
journal.
TRUE
3. The purchases journal is a special
journal for recording purchases of
supplies on credit.
FALSE
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Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
16-15
3. The purchases journal is a special journal for
recording purchases of supplies on credit.
FALSE
Only purchases of merchandise for resale are
recorded in the purchases journal, not supplies.
(Return to Topic Quiz)
McGraw-Hill/Irwin
Accounting Fundamentals, 7/e
© 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.