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Purchases Journal: A Purchases Journal is a special journal that records all the credit purchases made from the suppliers. It includes columns of date of transaction, invoice no., supplier name (i.e. from whom purchased), posting reference which is denoted as ‘Post. Ref.’ (that contains the account number of account found in the ledger), and separate columns for the accounts (containing debit or credit amount) that are affected by credit purchase transactions.
Four-Column Accounts: A four-column account includes columns of date, item, debit (amount) and credit (amount). It also includes posting reference (denoted as ‘Post. Ref.’) and two additional columns of debit balance and credit balance to record the balance after each
Ledger: A ledger is a book of account that is used to record transactions in particular accounts. The transactions occurring in an entity are first recorded in the journals and then they are posted to the respective ledger accounts in the particular Ledger for a particular period.
General Ledger: General Ledger is a book of account that contains five types of accounts, which are assets, liabilities, income, expenses and capital.
Accounts Payable Subsidiary Ledger: Accounts Payable Subsidiary Ledger is a book of account that contains the ledger accounts of various vendors from whom the goods or services are purchased on credit.
1.
To Compute: The total of each column of the given purchases journal.
2.
(i)
To Open: The four-column ledger accounts for Merchandise Inventory (118), Office Supplies (120), Equipment (150), and Accounts Payable (211).
(ii)
To Post: The transactions to these four-column ledger accounts from the purchases journal and using dates and posting references in the accounts.
3.
(i)
To Open: The four-column accounts in the accounts payable subsidiary ledger for Farrell Equipment, Jump Supply, and Last Tech.
(ii)
To Post: The transactions to these four-column ledger accounts from the purchases journal and using dates and posting references in the ledger accounts.
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Chapter 7 Solutions
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