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Chapter 9
Accounting Information Systems
can take a 3% discount on the payment (the original purchase was on January 3). The discount
amount is a credit to inventory and reduces the amount of cash that must be paid to the supplier.
Updating the subledger account in Figure 9.18 follows these steps.
1
Transfer the date from the cash payments journal to the date column in the subledger account.
2
Make a note of the journal and page number in the PR column of the subledger.
3
Transfer the amount of the accounts payable column to the debit column in the subledger.
4
Indicate the posting is complete by entering a check mark in the PR column in the cash payments
journal.
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
Jan 18 Antonio's Electric
750
4,200
126
4,074
Account:
Antonio's Electric
Date
PR
DR
CR
Balance
2016
Jan 3
PJ6
4,200 4,200 CR
Jan 18
CP4
4,200
0 CR
figure 9.18
At times, a transaction recorded in the special journal may require two amounts to be placed in the
Other column. When this happens, it is acceptable to use two rows of the special journal to record the
transaction. For example, suppose a company makes a $1,050 payment to their bank to pay back a loan
which includes $50 interest. If the cash payments journal does not have a column for bank loan or for
interest expense, than both amounts must be recorded in the Other column. The journal below shows
how this would be recorded.
Cash Payments Journal
Page 4
Accounts
Payable Other
Inventory
Cash
Date
Account
Chq # PR (DR)
(DR)
(DR)
(CR)
(CR)
Aug 31 Bank Loan
263 210
1,000
1,050
Interest Expense
530
50
Notice that cash is credited for the total amount of the payment on the first line. The amount of the bank loan
principal and interest are listed on two separate lines and the PR column indicates that both amounts updated
the appropriate ledger account.
1
2
3
4
