ch 5 credit journals
TRANSCRIPT
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SPECIAL JOURNALS CREDIT JOURNALS
CHAPTER 5 & 6
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Special Journal
An accounting record thatsummarises similartransactions to allow totals to
be posted to the ledgeraccounts at the end of thereporting period
They are used to avoidrepetition in the ledger
accounts
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Benefits of specialjournalsSummarise similar transactions
and reduce the number ofledger entries required
Journals provide a direct linkbetween the ledger entries andthe source documents
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Special Journals
Ledger accounts record alltransactions that affect aparticular item
But special journals record alltransactions of a particular type
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Types of Special Journals
Purchases Journal for creditpurchases of stock
Sales Journal for credit sales
of stock
Cash Receipts Journal for allcash received
Cash Payments Journal for allcash paid
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Special Journals
EVERYtransaction must berecorded in a journal before it isposted to the ledger accounts
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Purchases Journal
An accounting record thatsummarises all transactionsinvolving the purchase of stock
on credit during a reportingperiod
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Purchases Journal
All transactions involving thepurchase of goods on credithave the same debit and credit
entries:DR Stock Control
DR GST Clearing
CR Creditors Control
These transactions can besummarised in the Purchases
Journal, so only the total credit
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Purchases Journal
Date Creditor InvoiceNumber
Stock GST TotalCreditor
s
TOTAL $Example:
On 1st March, the businesspurchased stock on credit from ABCCo. for $100 plus $10 GST (Inv. 57)
Mar1
ABC Co. 57 100 10 110
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Creditors SubsidiaryLedgerIn the General Ledger, we use
an account called CreditorsControl
A Control account is used tosummarise the transactionsrecorded in the subsidiary
ledger accountsA Subsidiary Ledger is an
additional set of ledger
accounts kept outside the
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Creditors SubsidiaryLedgerThe Creditors Controlaccount in the General Ledgershows a summary of all
transactions affecting creditorsThe Creditors SubsidiaryLedger contains a separate
account for each individualcreditor, showing eachindividual transaction affectingthat creditors balance
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Creditors Schedule
The Creditors Schedule liststhe name and balance of eachindividual account in the
Creditors Subsidiary LedgerThe total amount on the
Creditors Schedule must equal
the balance in the CreditorsControl account
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Sales Journal
An accounting recordsummarising all transactionsinvolving the sale of stock on
credit during a reporting period
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Sales Journal
All transactions involving thesale of goods on credit have thesame debit and credit entries:
DR Debtors Control
CR Sales Revenue
CR GST Clearing
DR Cost of Sales
CR Stock Control
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Sales Journal
These transactions can besummarised in the Sales Journal,so only the total credit sales of
stock is posted to the ledgeraccounts at the end of theperiod
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Sales Journal
Date Debtor InvoiceNumbe
r
Cost ofsales
Sales GST TotalDebtor
s
TOTAL $Example:
On 3rd March, the business soldstock on credit to J. Smith for $200plus $20 GST (Inv. 77). The costprice of the stock was $100.
Mar3
J Smith77
100 200 20 220
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Debtors Subsidiary Ledger
The Debtors Control accountin the General Ledger shows asummary of all transactions
affecting debtorsThe Debtors SubsidiaryLedger contains a separate
account for each individualdebtor showing each individualtransaction affecting thatdebtors balance
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Debtors Schedule
The Debtors Schedule lists thename and balance of eachindividual account in the
Debtors Subsidiary LedgerThe total amount on the
Debtors Schedule must equal
the balance in the DebtorsControl account
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GST Clearing Account
At the end of the reportingperiod, the GST Clearingaccount must be balanced, and
reported as either a currentasset or current liability,depending on whether it has adebit or credit balance
Bene ts o s ng Contro
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Bene ts o us ng ControAccounts and Subsidiary
LedgersDetection of errorsAllocation of responsibility
Ease of reporting
RELEVANCE AND RELIABILITY!!!
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Questions
1. What is a control account?
2. What is a subsidiary ledgeraccount?
3. Why do we need to have both aCreditors Control acct and aCreditors Subsidiary Ledger?
4. Which qualitative characteristicdoes this assist with?
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Questions1. Show the DR & CR entries for
recording:a. Credit purchase of stock
b. Credit sale of stock
c. Payment to creditor
d. Receipt from debtor
e. GST settlement
2. Why do we need to have both aCreditors Control acct and a CreditorsSubsidiary Ledger?
3. State three differences between the