Critical Thinking Chapter 17

1. The purpose of the purchase journal is to record all purchases on account. The purchase of the cash payments journal is used  to record all transactions in which cash is paid out or decreased.
2. I would have to go back through the entries to see if I missed something or put in the wrong number.
3. I would create the schedule of accounts payable and to prove its accuracy I would compare the numbers to the previous months numbers.
4. The purchase of supplies is not recorded in the special columns of the purchases journal because the purchases do not occur often enough. Store equipment is not recorded in the journal's Purchases Debit column because it is not not merchandise purchased for resale. The General Debit column is not posted to the general ledger because the individual amounts were posted during the month.
5. The accounting documents I would need to prepare a cash proof are the general ledger, the cash receipts journal, and the cash payments journal. The steps I will perform are to record the beginning balance of Cash in Bank, entering the total cash received during the month, add the first and second lines of this Cash Proof, from that subtotal I would subtract the cash payments for the month, then I would compare this ending figure to the balance shown on the last check stub in the checkbook.
6. It is important to prove cash because it verifies that amounts recorded in the general ledger, cash receipts journal, and cash payments journal agree with the checking account balance.



"The Case for Cash." Peak Prosperity. N.p., n.d. Web. 7 Apr. 2014. <http://www.peakprosperity.com/insider/83957/case-cash>.