AB-8SE - Horngren'S Financial And Managerial Accounting

Question

Recording transactions in a purchases journal

 

Oct. 1 Purchased merchandise inventory on account with credit terms of 4/10,n/30 from Mayer Co., \(2,200.

11 Purchased office supplies on account from Bird Co., \)600. Terms were n/EOM.

24 Purchased furniture on account with credit terms of 3/10, n/60 from SillyCo., $900.

 

Use the following purchases journal to record the preceding transactions.

Purchase Journal                                                     Page 6
							Other Accounts DR
Date	Vendor Account Credited	Terms	Post. Ref.	Accounts Payable CR	Merchandise Inventory DR	Office Supplies DR	Account Title	Post. Ref.	Amount
2018

 

Step-by-Step Solution

Answer

Total amount payable to the creditors is $3,700.

Step1: Purchase Journal

A purchase journal is a special-purpose book for recording all types of purchases on account. A business may purchase several things like merchandise, office supplies, furniture, building, equipment, etc. When these items are purchased on the account then the transactions are recorded in the purchase journal.

Step 2: Transaction recording in the purchase journal

Purchase Journal                                                        Page 6
	Other Accounts DR
Date	Vendor Account Credited	Terms	Post. Ref.	Accounts Payable CR	Merchandise Inventory DR	Office Supplies DR	Account Title	Post. Ref.	Amount
2018
Oct 1	Mayer Co.	4/10, n/30		$2,200	$2,200
11	Bird Co.	n/EOM		$600		$600
24	Silly Co.	3/10, n/60		$900			Furniture		$900