Special Journals: Sales and Cash ReceiptsChapter 16

Using Special Journals▫Special journals have amount columns that

are used to record debits and credits to specific general ledger accounts

▫Most transactions are recorded on one line▫Special journals simplify the journalizing

and posting process

Journal Transaction

Sales journal Sale 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 payment by check

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Journalizing and Posting to the Sales Journal

•Sales journal is for recording sales of merchandise on account

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Completing the Sales Journal

•All special journals have amount columns used to record debits and credits to specific general ledger accounts.

•Instead of posting each transaction separately to the general ledger, the column totals are posted.

•Therefore, only three postings are made to the general ledger from the sales journal.

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Pg 454-455

Posting Sales Tax Payable and Accounts Receivable Totals

Pgs 455-456

Forwarding Totals to New Page

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Cash Receipts Journal

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• To keep the customer account balances current, the entries in the AT Credit column are posted daily to the Accounts Receivable Subsidiary Ledger.

• The entries in the General Credit column are posted daily to the individual general ledger accounts

• At month-end, all special amount column totals are posted to the general ledger accounts named in the headings.

Receiving Cash for payment of AccountsReceivable

Receiving Cash for Paymentof Accounts Receivable withDiscount

Receiving Cash for Sales

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Bankcard Sales

Receipt of cash for otherthan AR or Bankcard

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Posting to the AccountsReceivable Subsidiary Ledger

Posting to the General Ledger

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Completed Cash Receipt Journal

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The only column not posted as a total is the General Credit column.Those transactions are posted individually.

Proving the AR Subsidiary Ledger•The Accounts Receivable account is the

Controlling Account for all AR Subsidiary Accounts

•All accounts are included in alphabetical order, even those with a zero balance.

•The Schedule of Accounts Receivable report is usually prepared at the end of each month.

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Schedule of Accounts Receivable

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Detecting Errors in the Subsidiary Ledger•Proving the AR Subsidiary Ledger with

the controlling account verifies that the sum of the subsidiary ledger equals the controlling account’s ending balance. ▫Certain errors will be apparent such as: a

transaction that wasn’t posted or a miscalculation of account balance.

▫It doesn’t ensure that transactions were posted to the correct customer account.

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