3.

01 Key Terms – Page 1

Term Definition
Departmental accounting An accounting system showing accounting information for two
system or more departments

Merchandising business A business that purchases and sells goods

An account that reduces a related account on a financial

Contra account
statement

A deduction that a vendor allows on the invoice amount to

Cash discount
encourage prompt payment

Purchases discount A cash discount on purchases taken by a customer

Sales discount A cash discount on sales.

Salary The money paid for employee services

Pay period The period covered by a salary payment

Payroll The total amount earned by all employees for a pay period

Payroll taxes Taxes based on the payroll of a business

 3.01 Key Terms – Page 2

Term Definition
A deduction from total earnings for each person legally
Withholding allowance
supported by a taxpayer

Tax base The maximum amount of earnings on which a tax is calculated

Payroll register A business form used to record payroll information

A business form used to record details affecting payments

Employee earnings record
made to an employee
3.01 Journalizing Purchases on Account

Joe’s Electrical Company purchased audio equipment on account from Ely Supply
Company, $850. Purchase Invoice No. 56. Record the correct journal entry.

1. __________ Purchases – Audio

2. __________ Accounts Payable/Vendor

PURCHASES JOURNAL PAGE 1

1 2 3

ACCOUNTS
PURCHASES DEBIT
DOC. POST PAYABLE
DATE ACCOUNT TITLE NO. REF CREDIT AUDIO VIDEO

1 1

2 2

3 3

4 4
3.01 Journalizing Purchases on Account

On July 1, Joe’s Electrical Company purchased audio equipment on account from Ely
Supply Company, $850. Purchase Invoice No. 56. Record the correct journal entry.

1. Debit Purchases – Audio

2. Credit Accounts Payable/Vendor

PURCHASES JOURNAL PAGE 1

1 2 3

ACCOUNTS
PURCHASES DEBIT
DOC. POST PAYABLE
DATE ACCOUNT TITLE NO. REF CREDIT AUDIO VIDEO

1 July 1 Ely Supply Company 56 850.00 850.00 1

2 2

3 3

4 4
3.01 Journalizing Purchases Returns and Allowances

On July 25, Joe returned damaged audio equipment to Ely Supply Company, $150
from Purchase Invoice No. 56. Debit Memo 25. Record the correct journal entry.

1. __________ Accounts Payable/Vendor

2. __________ Purchases Returns and Allowances – Audio

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 1

2 2

3 3

4 4
3.01 Journalizing Purchases Returns and Allowances

On July 25, Joe returned damaged audio equipment to Ely Supply Company, $150
from Purchase Invoice No. 56. Debit Memo 25. Record the correct journal entry.

1. Debit Accounts Payable/Vendor

2. Credit Purchases Returns and Allowances – Audio

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 July 25 Accounts Payable/Ely Supply Co. DM 25 150.00 1

Purchases Returns and
2 Allowances – Audio 150.00 2

3 3

4 4
 3.01 Journalizing Cash Payments with a Purchase Discount

On May 1, Joe’s Electrical Company paid cash on account to The Video Supply Shack,
$450, covering Purchase Invoice No. 88 for video equipment for $500, less 1%
discount, $50. Check No. 57.

1. _______________ Accounts Payable/Vendor

2. _______________ Cash

3. _______________ Purchases Discount – Video

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT
 3.01 Journalizing Cash Payments with a Purchase Discount

On May 1, Joe’s Electrical Company paid cash on account to The Video Supply Shack,
$450, covering Purchase Invoice No. 88 for video equipment for $500, less 1%
discount, $50. Check No. 57.

1. Debit Accounts Payable/Vendor

2. Credit Cash

3. Credit Purchases Discount – Video

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT

May 1 Video Supply Shack C57 500.00 50.00 450.00

 3.01 Journalizing Cash Payment for Supplies

On July 9, paid cash for administrative supplies, $350. Check No. 67.

1. _______________ Supplies – Administrative

2. _______________ Cash

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT
 3.01 Journalizing Cash Payment for Supplies

On July 9, paid cash for administrative supplies, $350. Check No. 67.

1. Debit Supplies - Administrative

2. Credit Cash

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT

July 9 Supplies - Admin C67 350.00 350.00

 3.01 Journalizing Cash Payment of an Expense

On July 14, paid cash for utilities expense, $500. Check No. 75.

1. _______________ Utilities Expense

2. _______________ Cash

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT
 3.01 Journalizing Cash Payment of an Expense

On July 14, paid cash for utilities expense, $500. Check No. 75.

1. Debit Utilities Expense

2. Credit Cash

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT
July
14 Utilities Expense C75 500.00 500.00
3.01 Journalizing Sales on Account

On May 1, sold video equipment on account to Nicole’s Camera Shop, $1,500, plus
sales tax $105, total $1,605. Sales Invoice No.35.

1. _______________ Accounts Receivable/Customer

2. _______________ Sales – Video

3. _______________ Sales Tax Payable

SALES JOURNAL

Page 10
SALES SALES CREDIT
SALE POST TAX
DATE ACCOUNT CREDITED PAYABLE
NO REF ACCTS. REC. DR.
CREDIT Audio Video
3.01 Journalizing Sales on Account

On May 1, sold video equipment on account to Nicole’s Camera Shop, $1,500, plus
sales tax $105, total $1,605. Sales Invoice No.35.

1. Debit Accounts Receivable/Customer

2. Credit Sales – Video

3. Credit Sales Tax Payable

SALES JOURNAL

Page 10
SALES SALES CREDIT
SALE POST TAX
DATE ACCOUNT CREDITED PAYABLE
NO REF ACCTS. REC. DR.
CREDIT Audio Video
May
1 Nicole’s Camera Shop 35 1605.00 105.00 1,500
3.03 Journalizing Sales Returns and Allowances

On October 16, gave credit to Nicole’s Camera Shop for returned video equipment,
$500, plus sales tax $35 from Sales Invoice No. 35. Total $535. Credit Memorandum
No. 45.

1. _______________ Sales Tax Payable

2. _______________ Sale Returns and Allowances – Video

3. _______________ Accounts Receivable/Customer

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 1

2 2

3 3

4 4
3.03 Journalizing Sales Returns and Allowances

On October 16, gave credit to Nicole’s Camera Shop for returned video equipment,
$500, plus sales tax $35 from Sales Invoice No. 35. Total $535. Credit Memorandum
No. 45.

1. Debit Sales Tax Payable

2. Debit Sale Returns and Allowances – Video

3. Credit Accounts Receivable/Customer

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 Oct 16 Sales Tax Payable 45 35.00 1

2 Sales Returns & Allowances – Video 500.00 2

3 Accts. Rec./Nicole’s Camera Shop 535.00 3

4 4
3.01 Journalizing Cash Receipts with a Sales Discount

On February 14, received cash on account from Big Steve’s Music Store, $1,524.75
covering Sales Invoice No. 50 for audio equipment for $1,605 ($1,500 plus sales tax
$105) less 5% discount $80.25. Receipt No. 99.

1. _______________ Cash

2. _______________ Sales Discount – Audio

3. _______________ Accounts Receivable/Customer

CASH RECEIPTS JOURNAL

SALES
SALES DISCOUNT
GENERAL CREDIT DEBIT
SALES
ACCOUNTS TAX
DOC POST RECEIVABLE PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT CREDIT CREDIT AUDIO VIDEO AUDIO VIDEO DEBIT
 3.01 Journalizing Cash Receipts with a Sales Discount

On February 14, received cash on account from Big Steve’s Music Store, $1,524.75
covering Sales Invoice No. 50 for audio equipment for $1,605 ($1,500 plus sales tax
$105) less 5% discount $80.25. Receipt No. 99.

1. Debit Cash

2. Debit Sales Discount – Audio

3. Credit Accounts Receivable/Customer

CASH RECEIPTS JOURNAL

Sales Sales Discount

GENERAL Credit Debit
Sales
Accounts Tax
Doc Post Receivable Payable Cash
Date Account Title No. Ref. Debit Credit Credit Credit Audio Video Audio Video Debit
Feb Big Steve’s
14 Music Store 99 1,605.00 80.25 1,524.75
 3.01 Journalizing Cash Receipts with a Sales Return and
Sales Discount

On January 4, received cash on account from Little Bill’s Music Store, $81.34, covering
Sales Invoice No. 59 for audio equipment for $131.00 ($120 plus sales tax $11.00) less
Credit Memorandum No. 38 for $48.00 ($40.00 plus sales tax $8.00), less 2% discount,
$1.66, Receipt No. 33.

1. _______________ Cash

2. _______________ Sales Discount – Audio

3. _______________ Accounts Receivable/Customer

CASH RECEIPTS JOURNAL

SALES
SALES DISCOUNT
GENERAL CREDIT DEBIT
SALES
ACCOUNTS TAX
DOC POST RECEIVABLE PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT CREDIT CREDIT AUDIO VIDEO AUDIO VIDEO DEBIT
 3.01 Journalizing Cash Receipt with a Sales Return and
Sales Discount

On January 4, received cash on account from Little Bill’s Music Store, $81.34, covering
Sales Invoice No. 59 for audio equipment for $131.00 ($120 plus sales tax $11.00) less
Credit Memorandum No. 38 for $48.00 ($40.00 plus sales tax $8.00), less 2% discount,
$1.66, Receipt No. 33.

1. Debit Cash

2. Debit Sales Discount – Audio

3. Credit Accounts Receivable/Customer

CASH RECEIPTS JOURNAL

SALES
SALES DISCOUNT
GENERAL CREDIT DEBIT
SALES
ACCOUNTS TAX
DOC POST RECEIVABLE PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT CREDIT CREDIT AUDIO VIDEO AUDIO VIDEO DEBIT
Little Bill’s
Jan 4 Music Store R33 83.00 1.66 81.34
 3.01 Journalizing Cash and Credit Card Sales

On June 24, recorded cash and credit card sales, audio equipment $3,000, and video
equipment $2,500, plus sales tax $385; total $5,885. Tape No. 89.

1. _______________ Cash

2. _______________ Sales Tax Payable

3. _______________ Sales – Audio

4. _______________ Sales – Video

CASH RECEIPTS JOURNAL

Sales Sales Discount

GENERAL Credit Debit
Sales
Accounts Tax
Doc Post Receivable Payable Cash
Date Account Title No. Ref. Debit Credit Credit Credit Audio Video Audio Video Debit
 3.01 Journalizing Cash and Credit Card Sales

On June 24, recorded cash and credit card sales, audio equipment $3,000, and video
equipment $2,500, plus sales tax $385; total $5,885. Tape No. 89.

1. Debit Cash

2. Credit Sales Tax Payable

3. Credit Sales – Audio

4. Credit Sales - Video

CASH RECEIPTS JOURNAL

Sales Discount
GENERAL Sales Credit Debit
Sales
Accounts Tax
Doc Post Receivable Payable Cash
Date Account Title No. Ref. Debit Credit Credit Credit Audio Video Audio Video Debit
June
24 385 3,000 2,500 5,885
3.01 Preparing a Departmentalized Payroll Register

1. Enter the ________ ___________ of the payroll

period at the top of the payroll ____________

2. Record the _____ of the _________________

3. Enter the ___________________ number, marital

__________ and number of ________________

4. Record the _______ hours, regular __________,

overtime ___________ and ____________ earnings

5. Extend the _______________ earnings to the

appropriate _________________ column or
administrative salaries

6. Enter the payroll __________________ for each

employee

7. _______ the amounts for the deductions and enter the

total for each _____________________

8. After entering the _____ pay for all the employees,

_________ each payroll register amount column.
______________ the Total Deductions column total
from the Total _____________Column total.
3.01 Preparing a Departmentalized Payroll Register

1. Enter the last day of the payroll period at the top of

the payroll register

2. Record the date of the payment

3. Enter the employee number, marital status, and

number of allowances

4. Record the total hours, regular earnings, overtime

earnings, and total earnings

5. Extend the total earnings to the appropriate

department column or administrative salaries

6. Enter the payroll deductions for each employee

7. Add the amounts for the deductions and enter the

total for each employee

8. After entering the net pay for all the employees, total
each payroll register amount column. Subtract the
Total Deductions column total from the Total Earnings
Column total.
 3.01 Journalizing Payment of a Departmentalized Payroll
On July 15, paid cash for biweekly payroll, $7,100 (total payroll: audio $4,000; video
$3,000; administrative $2,000; less deductions: employee income tax – federal $500,
employee income tax – state $400, social security tax $500, Medicare tax $100, health
insurance $300, life insurance $100). Check no 66.

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT
 3.01 Journalizing Payment of a Departmentalized Payroll
On July 15, paid cash for biweekly payroll, $7,100 (total payroll: audio $4,000; video
$3,000; administrative $2,000; less deductions: employee income tax – federal $500,
employee income tax – state $400, social security tax $500, Medicare tax $100, health
insurance $300, life insurance $100). Check no 66.

CASH PAYMENTS JOURNAL

PURCHASES
DISCOUNT
GENERAL CREDIT

ACCOUNTS
CHECK POST PAYABLE CASH
DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT DEBIT AUDIO VIDEO CREDIT

July 15 Salary Expense - Audio 4,000 7,100

Salary Expense – Video 3,000

Salary Expense - Admin 2,000

Emp. Inc. Tax Pay - Fed 500

Emp. Inc. Tax Pay -
State 400

Soc. Sec. Tax Payable 500

Medicare Tax Payable 100

Health Ins Premiums
Pay 300

Life Ins Premiums Pay 100

3.01 Journalizing Employer Payroll Taxes

On July 15, recorded employer payroll taxes for the biweekly pay period ended June
30. Taxes owed are social security tax $500, Medicare Tax $100, federal
unemployment tax $70, state unemployment tax $400. Total payroll taxes by
department are Audio $500, Video $400, and Administrative $200. Memorandum No.
34.

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 1

2 2

3 3

4 4

5 5

6 6

7 7
3.01 Journalizing Employer Payroll Taxes

On July 15, recorded employer payroll taxes for the biweekly pay period ended June
30. Taxes owed are social security tax $500, Medicare Tax $100, federal
unemployment tax $70, state unemployment tax $400. Total payroll taxes by
department are Audio $500, Video $400, and Administrative $200. Memorandum No.
34.

GENERAL JOURNAL PAGE 1

1 2

DOC. POST. GENERAL

DATE ACCOUNT TITLE NO. REF. DEBIT CREDIT

1 July 15 Payroll Taxes Expense - Audio 500 1

2 Payroll Taxes Expense - Video 400 2

3 Payroll Taxes Expense - Admin 200 3

4 Social Security Tax Payable 800 4

5 Medicare Tax Payable 150 5

6 Unemployment Tax Payable – Federal 50 6

7 Unemployment Tax Payable - State 100 7