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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 9-3LESSON 9-3
Performing Additional Cash Payments Journal Operations
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
PETTY CASH REPORTPETTY CASH REPORT
A petty cash fund enables a business to pay cash for small expenses without writing a check. Errors made can cause a difference between actual cash on hand
and the record of the amount of cash that should be on hand
A cash short occurs when petty cash on hand is less than the recorded amount of cash on hand
A cash over occurs when petty cash on hand is more than the recorded amount of cash on hand
A petty cash report is prepared when the petty cash fund is to be replenished
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
PETTY CASH REPORTPETTY CASH REPORT
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page 248
6. Write the actual amount of cash on hand. 88
44
11
33
6655
77
1. Write the date and custodian name.
2. Write the fund total.
3. Summarize petty cash payments.
4. Calculate and write the total payments.
5. Calculate and write the recorded amount on hand.
7. Subtract the actual amount on hand from the recorded amount on hand and write the amount.
8. Write the total of the replenish amount.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
REPLENISHING A PETTY CASH FUNDREPLENISHING A PETTY CASH FUND
Petty cash short and petty cash over are recorded in an account titled Cash Short and Over Temporary account At the end of the fiscal year, this account is closed to Income
Summary
The balance can either be a debit or a credit More likely to be a debit because the petty cash fund is more likely
to be short than over A cash shortage adds to the cost of operating a business Classified as an operating expense
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LESSON 9-3
Cash Short and Over
DebitCash short
CreditCash over
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
5
LESSON 9-3
REPLENISHING A PETTY CASH FUNDREPLENISHING A PETTY CASH FUND
55 66
page 249
1. Date
2. Account titles
3. Check number
4. Expense amounts
5. Cash short as a debit; cash over as a credit
11
22 33
44
6. Total cash payment
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TOTALING, PROVING, and RULING a TOTALING, PROVING, and RULING a CASH PAYMENTS JOURNAL PAGE TO CASH PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARDCARRY TOTALS FORWARD
A journal is proved and ruled whenever a journal page is filled and ALWAYS at the end of a month
If the total debits do not equal the total credits, the errors must be found and corrected before moving on
After a journal page has been totaled and proved, the journal is ruled in preparation for forwarding to the next page
6
LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
7
LESSON 9-3
TOTALING, PROVING, AND RULING A CASH TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL PAGE TO CARRY PAYMENTS JOURNAL PAGE TO CARRY TOTALS FORWARDTOTALS FORWARD
22 3344
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page 250
11
661. Rule a single line.
2. Write the date.
3. Write the words Carried Forward in the Account Title column.
4. Place a check mark in the Post. Ref. column.
5. Write each column total.
6. Rule double lines.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
STARTING A NEW CASH PAYMENTS STARTING A NEW CASH PAYMENTS JOURNAL PAGEJOURNAL PAGE
The totals from the previous journal page are carried forward to the next journal page
The totals are recorded on the first line of the new page
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
9
LESSON 9-3
STARTING A NEW CASH PAYMENTS STARTING A NEW CASH PAYMENTS JOURNAL PAGEJOURNAL PAGE
11
22 33 44
page 251
1. Write the journal page number.
2. Write the date.
3. Write the words Brought Forward in the Account Title column.
4. Place a check mark in the Post. Ref. column.
5. Record the column totals.
55
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TOTALING, PROVING, AND RULING A TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE CASH PAYMENTS JOURNAL AT THE END OF A MONTHEND OF A MONTH
Equality of debits and credits in a journal is proved at the end of each month
After a cash payments journal has been totaled and proved at the end of the month, the journal is ruled
10
LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
11
LESSON 9-3
TOTALING, PROVING, AND RULING A CASH TOTALING, PROVING, AND RULING A CASH PAYMENTS JOURNAL AT THE END OF A PAYMENTS JOURNAL AT THE END OF A MONTHMONTH
2233 44
page 252
1. Rule a single line.
2. Write the date.
3. Write the word Totals in the Account Title column.
4. Write each column total.
5. Rule double lines.
11
55
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
TERMS REVIEWTERMS REVIEW
cash short cash over
page 253
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Work Together 9-3 pg. 253Work Together 9-3 pg. 253
Performing other cash payments journal operations
*The abbreviation for a check is C.
Rule page 5 of the cash payments journal using March 27 of the current year.
Begin page 6 of a cash payments journal
Kevin Tomlinson is the custodian of a $200.00 petty cash account. On March 31, he had receipts for the following total payments: supplies – office, $45.23; supplies – store, $66.18; miscellaneous, $49.25. A cash count shows $40.59 in the petty cash box. Prepare the cash report.
Record the replenishment of the fund on March 31. C536
Total, prove, and rule the cash payments journal.
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Performing Other Cash Payments Journal Performing Other Cash Payments Journal Operations Example Operations Example
1. Rule page 5 of the cash payments journal using March 27 of the current year.
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LESSON 9-3
5
27 Carried Forward ✔ 18,486.85 458.86 16,483.50 251,34 34,260.45
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Performing Other Cash Payments Journal Performing Other Cash Payments Journal Operations Example Operations Example
2. Begin page 6 of a cash payments journal.
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LESSON 9-3
6
Mar. 27 Brought Forward ✔ 18486.85 458.56 16483.50 251.3434260.45
31 Supplies - Office 54.23536 54.23
66.18Supplies - Store
49.25Miscellaneous Expense 1.25Cash Short and Over 34419.86251.34Totals 31 16483.5
0459.8118647.51
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Performing Other Cash Payments Journal Performing Other Cash Payments Journal Operations Example Operations Example
16
LESSON 9-3
March 31, 2011 Kevin Tomlinson
200.00
45.23
66.18
49.25
160.66 160.66
39.34
40.59
(1.25) (1.25)
159.41
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Performing Other Cash Payments Journal Performing Other Cash Payments Journal Operations Example Operations Example
17
LESSON 9-3
$ 18,647.51 $
459.8116,483.50251.34
34,419.86
$35,131.01
$35,131.01
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
ON YOUR OWN 9-3 page 253ON YOUR OWN 9-3 page 253
Performing other cash payments journal operations
*The abbreviation for a check is C.
Rule page 11 of the cash payments journal using June 28 of the current year.
Begin page 12 of a cash payments journal
Jerri Harris is the custodian of a $250.00 petty cash account. On June 30, she had receipts for the following total payments: supplies – office, $56.21; supplies – store, $48.27; repairs - $82.25; miscellaneous, $36.17. A cash count shows $26.48 in the petty cash box. Prepare the petty cash report.
Record the replenishment of the fund on March 30. C627
Total, prove, and rule the cash payments journal.
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
AUDIT YOUR UNDERSTANDINGAUDIT YOUR UNDERSTANDING
Answer the following questions using Word.
Turn in when done.
1. When journalizing a cash payment to replenish petty cash, what is entered in the Account Title column of the cash payments journal?
2. What is the usual balance of the account Cash Short and Over?
3. List the five steps for ruling a cash payments journal at the end of the month.
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
APPLICATION PROBLEM 9-3 and 9-4APPLICATION PROBLEM 9-3 and 9-4
Complete Application Problems 9-3 and 9-4 (page 261) using the aplia online working papers
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LESSON 9-3