Ch. 16: Special Journals: Sales and Cash ReceiptsAccounting IIMs. Alltucker

Special Journals: Sales and Cash Receipts Learning objectives

Identify the special journals and explain how they are used in a merchandising business

Record transactions in sales and cash receipts journals Post from the sales and cash receipts journals to

customer accounts in the Acc/Rec subsidiary ledger Foot, prove, total, and rule the sales and cash receipts

journals Post column totals from the sales and cash receipts

journals to general ledger accounts Prepare a schedule for the accounts receivable

subsidiary ledger Define the accounting terms in this chapter

Section 1: The Sales Journal What you will learn:

To identify the special journals and how they are used How to record sales of merchandise on account in a

sales journal How to post from the sales journal to the acc/rec.

subsidiary ledger accounts How to foot, prove, total, and rule the sales journal How to post column totals from the sales journal to

general ledger Why it’s important:

The use of the sales journal provides a systematic method of keeping track of sales on account.

The Sales Journal

In Accounting I: Each transaction required at least 3 lines

in the journal▪ Debit account▪ Credit account▪ Source document

In Accounting II: To improve efficiency many

merchandising businesses use special journals

Special Journals Amount columns used to record debits and

credits to specific general ledger accounts Most transactions are recorded on one line Simplify the journalizing and posting process The four most commonly used special journals

are: Sales sales of merchandise on account Cash Receipts Journal receipt of cash Purchases journal purchase of any asset on

account Cash payments journal payment of cash, including

check

Sales Journal

Special journal used to record sales of merchandise on account

Record the amount of the merchandise sold on account

Record the amount of sales tax onthe sale

Record the total amount to be received from the customer on account

Recording Sales of Merchandise on Account

Business Transaction

JOURNAL ENTRY

On December 1, On Your Mark sold merchandise on account to Casey Klein for $200 plus $12 sales tax, Sales Slip 50.

Sales of Merchandise on Account 1. enter date 2. enter sales slip number 3. enter the name of customer in customer in the

“Customer’s Account Debited” column 4. Enter the total of the merchandise sold in sales

credit column 5. enter amount of sales tax in sales tax payable credit 6. enter the total amount to be received in Acct/Rec

debit column

Posting a Sales Journal Entry to Subsidiary ledger 1. enter date of transaction 2. in Post Ref enter “S” and page number “S1” 3. Debit column of subsidiary ledger account enter total

amount to be received 4. Compute new balance and enter it in the balance column 5. enter the check mark in the post reference column in journal

Completing the Sales Journal All special journals have amount columns used

to record debit and credits to specific general ledger accounts Simplify posting Instead of posting each transaction separately to

general ledger, only amount column totals are posted

Column totals to be posted:▪ Sales credit▪ Sales tax payable credit▪ Accounts receivable debit▪ **only three postings are made to the general ledger from the sales

journal

Footing, Totaling, Proving, and Ruling the Sales Journal 1. Draw a single line across the three columns 2. Foot the amount columns—column totals

written small 3. On a separate piece of paper—test equality of

debits and credits 4. Enter the current date and write “Totals” 5. Enter column totals in ink, just below the

footing 6. Double rule the three column amounts 7. After footing, totaling, proving, ruling—post

totals to the general ledger Refer to page 423-424 for an example

Footing, Totaling, Proving, and Ruling the Sales Journal

Posting the Totals of the Sales Credit Column 1.In “Sales” ledger—enter the date of the

totals 2. enter the sales journal letter and page

number “S2” 3. In credit column, enter the total from sales

credit column from sales journal 4. Compute new balance in ledger 5. Return to sales journal and enter the Sales

account number below the double rule in the Sales credit column—in parentheses

See page 424-425 for an example in your book

Posting the Totals of the Sales Credit Column

Posting the Total of the Sales Tax Payable Credit Column 1. Enter the date in the ledger 2. enter the sales journal page number

“S2” 3. In the credit column, enter the total

from Sales Tax Payable Credit column from Sales journal

4. Compute new balance 5. Return to sales journal and enter the

account number below the column total 6. Refer to page 425-426 for an example

Posting the Totals of the Sales Tax Payable Credit Column

Posting the Totals of the Accounts Receivable Debit Column

The last amount to be posted is the Accounts Receivable Debit Column

Proving the Sales Journal at the End of a Page All special journals are totaled and

proved and the end of every month If a business has more transactions

than one page in one month—the page needs to be totaled and proved before continuing

Refer to page 427 for an example

Proving the Sales Journal at the End of a Page 1. Draw a single line across the three columns 2. enter date of last transaction 3. write “Carried Forward” in customer column 4. Place a check mark in the post reference column

—indicates that these totals are not to be posted 5. enter the column totals in ink—DO NOT DOUBLE

RULE THE COLUMN TOTALS 6. On the next page, enter the new page number 7. On lines 1 and 2 enter the complete date 8. Write “Brought Forward” in account column 9. Place a check mark in the post reference column 10. Enter the column totals from the previous page

Proving the Sales Journal at the End of a Page