century 21 accounting © thomson/south-western lesson 10-1 journalizing sales on account using a...
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CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1LESSON 10-1
Journalizing Sales on Account Using a Sales Journal
Original created by M.C. McLaughlin, Thomson/South-WesternModified by Deborah L. Burns, Johnston County Schools, West Johnston High School
CENTURY 21 ACCOUNTING © Thomson/South-Western
JOURNALIZING SALES ON ACCOUNT JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNALUSING A SALES JOURNAL
Purchases & sales of merchandise are the two major activities of a merchandising business
A person or business to whom merchandise or services are sold is called a customer
Laws of most states & some cities require that a tax be collected from customers for each sale madeA tax on a sale of merchandise or services is
called a sales tax
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LESSON 10-1
CENTURY 21 ACCOUNTING © Thomson/South-Western
JOURNALIZING SALES ON ACCOUNT JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNALUSING A SALES JOURNAL
Business must file reports with the proper government unit & pay the amount of sales tax collected. Every business collecting a sales tax needs accurate records of the amount of
Total sales &Total sales tax collected
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALES TAXSALES TAX page 270
The amount of sales tax collected is a business liability until paid to the government agencyThe sales tax amount is recorded in a separate liability account titled Sales Tax Payable, which has a normal credit balance
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALES OF MERCHANDISE ON ACCOUNTSALES OF MERCHANDISE ON ACCOUNT page 271
A sale of merchandise may be:
On accountFor cash
Regardless of when payment is made, the revenue should be recorded at the time of a sale, not on the date cash is received
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALES OF MERCHANDISE ON ACCOUNTSALES OF MERCHANDISE ON ACCOUNT page 271
A sale for which cash will received at a later date is known as a sale on accountA sale on account is also referred to as a charge saleAccounts receivable is an asset account with a normal debit balance
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALES JOURNALSALES JOURNAL page 272
oA special journal used to record only sales of merchandise on account is called a sales journaloThe special amount columns in this sales journal are Accounts Receivable (Debit), Sales (Credit), & Sales Tax Payable (Credit)
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALES INVOICESALES INVOICE page 272
A form describing the goods or services sold, the quantity, and the price is known as an invoiceAn invoice used as a source document for recording a sale on account is known as a sales invoice. It is also known as a sales ticket or sales slip
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
SALE ON ACCOUNTSALE ON ACCOUNT
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page 273
November 3. Sold merchandise on account to Village Crafts, $540.00, plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76.
1. Write the date.
6. Write the sales tax amount.
2. Write the customer name.
3. Write the sales invoice number.
4. Write the total amount owed by the customer.
5. Write the sales amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
TOTALING, PROVING, AND RULING A TOTALING, PROVING, AND RULING A SALES JOURNALSALES JOURNAL page 274
At the end of each month, businesses total, prove, and rule its sales journal
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1
TERMS REVIEWTERMS REVIEW
customer sales tax sales journal
page 275