Buying goods and supplies: journal entry worksheet
Name: Date:
Convention: United States (US textbooks)
Record each transaction as a journal entry: write each account in the Debit or the Credit column with its amount.
Buying merchandise for cash
A store buys merchandise for resale at a cash-and-carry wholesaler for $1,200.00 and pays in cash. Goods bought for resale are exempt from sales tax.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Accounts Payable · Cost of Goods Sold · Sales Revenue · Accounts Receivable · Inventory · Cash
Account Debit Credit Buying two lines of merchandise on account
A store buys merchandise for resale on account from one supplier: shirts for $1,400.00 and trousers for $900.00, on a single invoice payable in 60 days. Goods bought for resale are exempt from sales tax.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Notes Payable · Cash · Accounts Payable · Cost of Goods Sold · Inventory · Accounts Receivable · Purchases
Account Debit Credit Buying merchandise, paying part in cash and the rest on account
A store buys merchandise for resale for $4,000.00. On delivery it pays $1,500.00 in cash; the rest is on account, payable in 30 days. Goods bought for resale are exempt from sales tax.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Accounts Receivable · Notes Payable · Sales Revenue · Cash · Cost of Goods Sold · Inventory · Accounts Payable
Account Debit Credit Paying a supplier’s invoice in full
Last month a store bought merchandise on account for $3,200.00 and recorded the purchase. Today it pays the supplier the full amount by check.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold. No discount is granted for the payment.
Accounts to choose from: Purchase Discounts · Accounts Receivable · Cost of Goods Sold · Accounts Payable · Cash · Inventory
Account Debit Credit Returning part of a purchase on account
A store bought 60 lamps on account at $45.00 each and recorded the purchase. 8 of them are the wrong model, so it sends them back, and the supplier issues a credit memo for them. The invoice has not been paid yet.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Sales Revenue · Inventory · Purchase Discounts · Cash · Cost of Goods Sold · Accounts Payable · Accounts Receivable
Account Debit Credit Paying a supplier within the discount period
A store bought merchandise on account for $5,000.00, terms 2/10, n/30, and recorded the purchase at the invoice price. It pays the supplier by check within the discount period.
Assumptions: This store uses the periodic inventory system: purchases are recorded in Purchases at the invoice price, and discounts taken are recorded in Purchase Discounts.
Accounts to choose from: Interest Revenue · Purchase Discounts · Inventory · Cost of Goods Sold · Accounts Receivable · Cash · Accounts Payable
Account Debit Credit Paying freight on purchased merchandise
A store bought merchandise FOB shipping point, so it pays the shipping. On delivery it pays the trucking company $360.00 in cash. The supplier’s invoice for the goods was recorded earlier.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Cash · Cost of Goods Sold · Inventory · Accounts Payable · Accounts Receivable · Notes Payable
Account Debit Credit Buying office supplies for cash
A company buys office supplies (paper, toner, folders) for $240.00, sales tax included, and pays in cash.
Assumptions: The company records supplies as an asset (Supplies) when it buys them and expenses them as they are used. Sales tax paid on supplies is part of their cost.
Accounts to choose from: Sales Tax Payable · Inventory · Supplies · Accounts Payable · Cash · Supplies Expense
Account Debit Credit Buying office supplies on account
A company buys a stock of office supplies (paper, toner, folders) on account for $850.00, sales tax included. The supplier’s invoice is payable in 30 days.
Assumptions: The company records supplies as an asset (Supplies) when it buys them and expenses them as they are used. Sales tax paid on supplies is part of their cost.
Accounts to choose from: Cash · Supplies · Notes Payable · Supplies Expense · Accounts Payable · Inventory · Sales Tax Payable
Account Debit Credit Buying merchandise with a trade discount
A store buys merchandise for resale on account. The supplier’s invoice shows a list price of $8,000.00, less a 15% trade discount. Goods bought for resale are exempt from sales tax.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Inventory · Sales Revenue · Purchase Discounts · Purchases · Cash · Cost of Goods Sold · Accounts Payable
Account Debit Credit Buying merchandise on account
A store buys merchandise for resale on account for $2,000.00. Goods bought for resale are exempt from sales tax. The supplier’s invoice is payable in 30 days.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Inventory · Sales Tax Payable · Cost of Goods Sold · Accounts Payable · Notes Payable · Accounts Receivable · Cash
Account Debit Credit Returning merchandise bought on account
A store returns to its supplier damaged merchandise that it bought on account for $500.00. The supplier issues a credit memo for the full amount; the invoice had not been paid yet.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Notes Payable · Inventory · Sales Revenue · Accounts Payable · Accounts Receivable · Cost of Goods Sold · Cash
Account Debit Credit Buying merchandise with a cash discount on the invoice
A store buys merchandise for resale and pays at once in cash. Because it pays immediately, the supplier’s invoice deducts a 2% cash discount from the price of $6,000.00. Goods bought for resale are exempt from sales tax.
Assumptions: Perpetual inventory: each sale also records its cost of goods sold.
Accounts to choose from: Purchase Discounts · Interest Revenue · Accounts Payable · Cash · Cost of Goods Sold · Inventory
Account Debit Credit Buying merchandise under the periodic inventory system
A store’s Inventory account still shows $18,000.00, the value of the goods counted at the end of last year. In March it buys merchandise for resale on account for $4,500.00; the goods go straight into its stockroom. Goods bought for resale are exempt from sales tax.
Assumptions: This store uses the periodic inventory system: purchases are recorded in a Purchases account, and Inventory is updated only after the year-end count.
Accounts to choose from: Accounts Payable · Freight-In · Inventory · Purchases · Cash · Purchase Discounts · Cost of Goods Sold
Account Debit Credit Paying part of a supplier’s invoice by bank transfer
A store owes a supplier $9,700.00 for merchandise bought on account last month and already recorded. The supplier agrees to be paid in two parts: today the store transfers $4,000.00 from its bank account, and the rest is due next month.
Accounts to choose from: Cash · Notes Payable · Accounts Receivable · Purchase Discounts · Inventory · Accounts Payable
Account Debit Credit
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