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Mastering Cash Payments: Special Journals & Expense Management

Learn to journalize and post transactions, maintain Cash Payments Journal, and handle Accounts Payable efficiently. Understand the benefits of special journals, manage prepaid insurance, and optimize expenses to boost profits.

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Mastering Cash Payments: Special Journals & Expense Management

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  1. Ch. 10 Journalizing Purchases and Cash Payments Mr. Belolan

  2. Chapter Objectives • Journalize and Post transactions to the Cash Payments Journal • Total, prove and rule the Cash Payments Journal • Prepare a schedule of Accounts Payable

  3. Which Journal? • Special Journals • Sales • Cash Receipts • Purchases • Cash Payments

  4. Why Use Special Journals? • Less clutter • Organization • Money In • Money Out

  5. Prepaid Insurance • Purchased by business to protect against fire, theft or flood • Amount paid is called a premium • Paid in advance • An asset, debit balance

  6. Paying Expenses • Examples? • Rent • Utilities • Advertising • Salaries • How can we increase profits based on our expenses? • Recorded in cash payments journal

  7. Other Cash Payments • Pay for invoices received • FOB destination -- supplier pays shipping cost • FOB shipping point -- buyer pays shipping cost

  8. Concept Review • Why should we use the 4 special journals? • Why would a business purchase and offer purchases on account? • Problem 10-1, 10-2 • Text page 245 • Workbook page 213, 215 & 217

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