Accounts payable (A/C P.A) column represents the amounts paid to creditors.Total of purchases column is posted as debit to the purchases account in the general ledger.Total of discount column is posted as a credit to the discount account in the general ledger.Total of cash column is posted as a credit to the cash account in the general ledger.The procedure for posting the cash payment journal to ledger accounts is described below: Solution Posting Cash Payment Journal to Ledger Accounts May 31: Purchased merchandise for cash $1,000.May 27: Purchased merchandise for cash $780.May 21: Paid Sam Corporation $1,550 cash in settlement of $1,600.$1,880 cash and received discount of $120. May 01: Paid rent for the month amounting to $900.Record the following cash transactions for 2016 in a cash payment/disbursement journal. The type of format chosen depends on the needs of the individual business. Like a cash receipts journal, various formats are used for cash payment journals. Format of Cash Payment Journal or Cash Disbursement Journal Given that the basic posting procedures are the same as those for the other journals, the actual postings are not shown in the exhibit. They can be posted daily, monthly, or at other convenient intervals. The accounts in the other columns must be posted individually. All the totals, except those in the other columns, are posted to the appropriate general ledger accounts. Entries to the Accounts Payable account should be posted daily to the subsidiary accounts payable ledger.Īt the end of the month, all amount columns are summed. The cash payment journal is also posted in two stages. Thus, the entries are entered sequentially into the cash payment journal as they occur. The entries in the cash payment journal are recorded and posted in a similar manner to those in the cash receipts journal. June 30: Loan payment of $120, of which $90 is interest.Smith's Bakeries for invoice dated June 18. June 16: Paid $980 to Jones Farm for invoice dated June 6.June 15: Paid manager's salary, $2,200, for first half of June.June 10: Paid to Super Cola $1,660 for invoice dated June 1.June 09: Purchase of equipment for $10,000 with 20% down payment.June 03: Paid to Super Cola (account no.June 01: Paid Ricco's Pizza (account no.June 01: Payment of store lease, $1,500.To demonstrate how entries are recorded in the cash payment journal, consider the following data from Fortune Retail Store concerning its cash payments during the month of June: The main source of entries for this journal are check stubs and payment requests. The debit columns will include at least an Accounts Payable column, a Purchases column, and the Other Accounts column.Īgain, other specific account columns can be added if needed. If necessary, other specific account columns can be added if they are used routinely. The other credit column is for Other Accounts. The journal has a Date column, a Check Number column, a Payee column, and at least two credit columns, one for cash and one for purchase discounts. The cash payment journal is used to record the cash disbursements made by check, including payments on account, payments for cash merchandise purchase, payments for various expenses, and other loan payments.Ī typical cash payment journal is shown in the example below.
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