this is jody trana chapter 7 part 2 of principles of accounting this chapter represents a new and streamlined process to transfer transactions from journals into the general ledger we are using special journals to do this and we are avoiding making all of the numbers of journal entries that we've been practicing of course you remember the general journal that's the journal where we journal our journal entries and we are learning the special journals in the last segment we learned the sales journal and the cash receipts journal today we're going to practice the purchases journal and the cash payments journal the transactions as they are entered into our journals also need to be posted to our ledgers we have learned about two kinds of ledgers the general ledger that is the book that has every single account in it for our business and all of the activity that has happened within that account and its balance and we just learned about the subsidiary ledgers two of them the accounts receivable a subsidiary ledger and the accounts payable subsidiary ledger both of those keep track of all of the amounts that are owed to us for payments on account and the amounts that we owe to others for purchases on account you will remember that if we were to add up all of the balances in our accounts receivable subsidiary ledgers such as we have here for galvez levy harman and schmidt the total of all four of these accounts receivable subsidiary ledgers will agree with our one accounts receivable account in the general ledger the subsidiary ledger is just a way to break out this number so that we can identify who it is that actually owes us money and how much money they each owe us one of the special journals that we're highlighting today is the purchase journal the purchase journal includes on it only purchases on account so anytime we've made a purchase on account it will go into the purchases journal you'll see when you look at the titles of the columns that the primary item that we're going to always have is accounts payable that identifies it as purchases on account but those payables might be for different items maybe most often it's for merchandise inventory but we also could purchase office supplies on account or other items on account so we have a column for merchandise inventory for debits a debit column for office supplies and then we have an other column here we have two examples equipment that would be a debit account and we're purchasing equipment on account and we also have furniture that we've purchased on account from this purchases journal we're going to post things into two ledgers a subsidiary ledger and the general ledger subsidiary ledgers gets posted immediately whenever we have a vendor that we owe money to that's our accounts payable subsidiary ledger and our general ledger gets posted at the end of the month when we total up our purchases journal here you can see on the left our purchases from our vendors advanced printing city office supply hanes textiles o'leary furniture and pioneer plastics every time we made a purchase on account that went into our purchases journal we also wrote that amount into our accounts payable subsidiary ledger to show who we owe money to and how much money we owe on the right hand side you will see all of our general ledger accounts and the totals that get posted to these accounts at the end of each month our last special journal is the cash payments journal this journal holds all of the transactions that we make when we pay cash anytime cash comes out of our accounts it will show on this cash payments journal you'll see in the column all the way to the right the cash credits right next to it merchandise inventory credits and accounts payable debits those two amounts are there for when we make payments on our accounts payable if it's not accounts payable payments everything else is going to go into the next column on the left other account debits when we post things to our subsidiary ledgers we're going to post our accounts payable amounts to the accounts payable subsidiary ledger and then at the end of the month we're going to total all of our columns and make those postings to our general ledger here you can see on the left the two payments that we made to our accounts payable subsidiary ledgers one for hanes textiles and one for pioneer plastics on the right hand side you can see all of our general ledger accounts and all of the totals that got posted to each of these accounts from our columns in our cash payments journal