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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

What steps are followed in posting purchases returns and allowances from the general journal to the general ledger and accounts payable ledger?

To determine

Indicate the steps followed in posting the purchases returns and allowances from general journal to general ledger and the accounts payable ledger.

Explanation

Purchases returns and allowances: Sometimes, customers either return goods due to manufacturing defects, or accept to keep the defective goods for a reduction in purchase price. That amount of goods returned, or reduced amount in purchase price, is referred to as purchases returns and allowances. These are recorded as contra-purchase accounts.

Posting purchases returns and allowances from general journal to the general ledger:

Step 1: Enter the date of the transaction in the Date column.

Step 2: Enter the debit amount and the credit amount in the Debit and Credit columns respectively.

Step 3: Compute the ending balance and enter the new balance in the respective debit and credit columns.

Step 4: Enter the journal page number in the Posting Reference column of the ledger for each transaction...

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