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Chapter 9
Accounting Information Systems
The Cash Payments Journal
The cash payments journal records all cash payments made by the company. There is a column to
record the cheque number, since a good control is to have all payments made by a cheque. Various
columns are provided for the most common reasons for paying with cash, and an Other column
is used to record cash payments for items that do not fall under one of the given columns. Notice
that Inventory appears with both a debit and credit column. The debit side is used if inventory is
purchased with cash (cheque) and the credit side is used if the company pays a supplier of inventory
early and receives a discount.
Accounts
Payable
Other
Inventory
Cash
Chq #
PR
(DR)
(DR)
(DR)
(CR)
(CR)
figure 9.15
Cash purchases are recorded in the cash payments journal, as shown in Figure 9.16. Accounts
payable is not affected, so no entry should be posted to the subledger accounts.The Other column
was not used, so no entry should be posted to the general ledger at this time.The general ledger is
only updated at the end of the month when the columns are totalled.
Cash Payments Journal
Page 4
Accounts
Payable Other
Inventory
Cash
Date
Account
Chq # PR
(DR)
(DR)
(DR)
(CR)
(CR)
Jan 6 Electro Parts
748
1,500
1,500
figure 9.16
The transaction on January 15 in Figure 9.17 is a withdrawal from the company by the owner.
Since there is no column with Owner’s Drawings as a heading, the amount is recorded in the
Other column.The post reference (310) indicates that the amount of the withdrawal shown is
immediately updated to owner’s drawings in the general ledger. At the end of the month, the total
of the Other column will not be posted because any amount in this column is posted immediately
to the appropriate ledger account.
Cash Payments Journal
Page 4
Accounts
Payable Other
Inventory
Cash
Date
Account
Chq # PR
(DR)
(DR)
(DR)
(CR)
(CR)
Jan 6 Electro Parts
748
1,500
1,500
Jan 15 Hanlon, Drawings
749 310
500
500
figure 9.17
The payment to a supplier on January 18 immediately updates the subledger account since it affects
accounts payable. Similar to the other journals, the posting to the subledger is shown in the cash
payments journal with a checkmark. Since the terms of the purchase were 3/15, n/30, the company
