Chapter 12:

Vendors & Purchases

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Vendors & Purchases

Chapter 12 begins Part 3 of the book: Peachtree

Complete Accounting 2012 for Merchandising

Businesses.

Merchandising businesses are retail stores that

resell goods and services.

In Chapter 12, you set up two merchandising

businesses: Cynthia’s Service Merchandise, a

partnership owned by Eric Lerette and Cynthia

Barber; and Student Name [use your first and last

name] Sales and Service, a sole proprietorship.

12-2

Accounts Payable Transactions, p. 430

Vendor sends Cynthia's Service Merchandise an invoice.

You enter the invoice as a purchase.

When it is time to pay the invoice, you select the invoice(s) from the vendor you want to pay and print a check.

12-3

Peachtree Tips

In Chapter 12, you set up two merchandising businesses: Cynthia’s Service Merchandise and the end-of-chapter exercise, Student Name Sales and Service (Exercises 12-1 and 12-2 on pp. 485-493).

The companies that you set up in Chapter 12, continue in Chapters 13, 14 and 15.

If the general ledger account (GL account field) is not displayed on the Purchases/Receive Inventory window or Payments window, check the global options. In the Hide General Ledger Accounts section, all boxes must be unchecked (see pp. xvi-xvii, Setting Global Options.)

12-4

Peachtree Tips (continued)

What if you want to use Cynthia’s Service Merchandise on a computer that does not have this company set up in Peachtree?

If you start Peachtree and the appropriate company cannot be opened, use the Restore Wizard to select A New Company. Using the appropriate backup file, and the selection for A New Company, you can start where you left off the last time Peachtree was used.

If Cynthia’s Service Merchandise (or another name Service Merchandise) is not listed either on the Open an Existing Company window or when you select <Browse>, click Cancel; then Close. From Peachtree’s startup window, there are four menu bar options—File; Options; Services; Help — .

Select File; Restore. Restore A New Company from the appropriate backup file. This allows you to bypass creating a new Peachtree company and restore the company data from a backup file (.ptbextension).

12-5

Backing Up and Saving Files in Chapter 12

Part 3 Introduction, p. 426

Backup (.ptb)

Excel (.xlsx) and Adobe (.pdf) Kilobytes Page Nos.

Chapter 12 Starting Balance Sheet.ptb 971 KB 442-443

Chapter 12 Begin.ptb 981 KB 456

Chapter 12.ptb 1,017 KB 481-482

Chapter 12_CofA_PJ_CDJ_VL_GLTB.xlsx 29 KB 482-484

Exercise 12-1_Starting Balance Sheet.ptb 914 KB 488

Exercise 12-1.ptb 939 KB 491

Exercise 12-2.ptb 953 KB 493

Exercise 12-2_CofA_PJ_CDJ_VL_GLTB.xlsx 28 KB 493

12-6

Backing Up and Saving Files Chapter 12

(concluded), p. 426

Adobe (.pdf) Kilobytes Page Nos.

Exercise 12-2_Chart of Accounts.pdf 60 KB 493

Exercise 12-2_Purchase Journal.pdf 50 KB 493

Exercise 12-2_Cash Disbursements Journal.pdf 51 KB 493

Exercise 12-2_Vendor Ledgers.pdf 50 KB 493

Exercise 12-2_General Ledger Trial Balance.pdf 51 KB 493

12-7

Accounting Software, p. 437Peachtree and QuickBooks are used by small

companies. As the company grows to mid-

size, Peachtree and Microsoft Dynamics GP

can be used. Large companies use MS

Dynamics GP. As companies grow in size,

their accounting software needs change.

QuickBooks

Peachtree

Microsoft Dynamics GP

Small

companies to

Large

companies

Company

size

No. of

employees

Small 1-20

Medium 20-500

Large 500+

12-8

How the purchases and payments tasks

work together, p. 448

Purchases/Receive Inventory

Enter the Vendor Invoice

Payments

Apply the Vendor Invoice as a Check

Print Checks

Print the Disbursement Check

12-9

Glossary of Terms

Chapter 12

12-10

Vendors, p. 429

Merchandising businesses purchase the

merchandise they sell from suppliers

known as vendors.

Cynthia’s Service Merchandise vendors

are shown below and on p. 448.

12-11

Accounts payable transactions, p. 429

Purchases of merchandise for resale,

assets, or expenses incurred on credit

from vendors.

When Cynthia’s Service Merchandise

makes purchases on account from

vendors, the transactions are known as

accounts payable transactions.

12-12

Accounts payable, p. 429

The money a company owes to a supplier

or vendor.

12-13

Database, p. 437

An organized body of related information.

As the database gets larger, the depth of

processing increases and more features

and functions are available.

12-14

Purchase Journal, p. 457

In Peachtree, the Purchases/Receive

Inventory window is the purchase journal.

In the Purchase Journal, or

Purchases/Receive Inventory window, you

can enter invoices from vendors or enter

and print purchase orders.

12-15

Purchases/Receive Inventory window, p. 459

is Peachtree’s Purchase Journal

12-16

Accounts payable ledger, p. 457

Shows the account activity for each

vendor. Same as vendor ledger.

12-17

Vendor ledger, p. 457

Shows the account activity for each vendor. The

vendor ledger is also called the accounts payable

ledger.

The vendor ledger is shown on p. 480.

12-18

Average cost, p. 462

A method of computing inventory. See

weighted-average method on the next

slide.

12-19

Weighted-average method, p. 462

This method of inventory pricing divides

the cost of the inventory purchased by the

quantity of merchandise purchased. This

unit cost is multiplied by the ending

inventory.

12-20

Cash disbursements journal, p. 463

All payments of cash are recorded in the

cash disbursements journal.

In Peachtree, the Write Checks and

Payments tasks are recorded in the cash

disbursements journal.

12-21

Payments window, p. 472

Cash Disbursements JournalThe payments window shows a payment to a vendor

minus a return and purchase discount.

12-22

Going to the Net, p. 484Watch the Vendor Management Center video at

www.peachtree.com/productsServices/whatsNew/.

Answer these questions:

1. What Peachtree feature allows the user to simplify vendor

searches?

2. What was the result of being able to negotiate with the

vendor?

Watch additional videos on this website, too.

12-23

Analysis Question, p. 493

What is the balance in the Accounts Payable account,

Cynthia’s Service Merchandise? Why?

The balance in the Accounts Payable account is $300.

This balance reflects the amount owed to the vendor,

Jimmy Jackson Hardware. The Vendors Ledgers

subsidiary account balance is the same as the Accounts

Payable controlling account balance in the general

ledger.

12-24

Assessment Rubric, p. 494

Date Transaction

Navigation

Center/Module

Task

Window

Journal

Dr./Cr.

1/3/12 Invoice No. 480CP was

received from Carson Phillips

Tools for the purchase of 10

tool kits for a unit cost of $30.

Vendors & Purchases;

Enter Bills, New Bill

Accounts Payable

Purchases/Recei

ve

Inventory

window

Purchases Journal

Dr. 12000,

Merchandise Inventory,

$300

Cr. 20000, Accounts

Payable/Carson

Phillips Tools, $300

1/6/12 Returned two tool kits to

Carson Phillips Tools, Invoice

No. 480CP. Paid $30 for each

tool kit: VCM480CP.

Vendors & Purchases;

Credits and Returns,

New Vendor Credit

Memo

Accounts Payable

Vendor Credit

Memos window

Purchases Journal

Dr. 12000,

Merchandise Inventory,

$60

Cr. 2000, Accounts

Payable/Carson

Phillips Tools, $60

12-25

Assessment Rubric (concluded), p. 494

Date Transaction

Navigation

Center/Module

Task

Window

Journal

Dr./Cr.

1/10/12 Issued Check No. 2021 to

Carson Phillips Tools for

merchandise purchased on

January 3, less the January 6

return, Invoice No. 480CP.

Vendors & Purchases;

Pay Bills, Pay Bill

Accounts Payable

Payments

window

Cash Disbursements

Journal

Dr. 20000, Accounts

Payable/Carson

Phillips Tools, $240.

Cr. 59500, Purchase

Discounts, $4.80

Cr. 10200, Caliber

Bank, $235.20, Check

No. 2021

12-26

Online Learning Center Go online to www.mhhe.com/yacht2012 for additional resources. Link to

Student Edition, select Chapter 12.

o Interactive Testing: Online multiple-choice and true and false

questions. Tests are graded and can be emailed to instructor.

o Glossary of Terms: Boldfaced/italicized words within chapter.

o Feature Quizzes: Includes user interface questions, matching,

and review of chapter concepts with immediate feedback.

o Two Flash Videos: Demonstrations of purchases and payments.

o PowerPoints: Narrated slides.

o Assessment Rubrics: Reviews journal entries, reports,

navigation centers, modules, and task windows.

o Going to the Net: Internet research.

o QA Templates: End-of-chapter summary and review questions

and analysis question.

12-27