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Special Journals: Sales and Cash Receipts Making Accounting Relevant In a merchandising business, revenue from sales fuels business operations. Making.

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Presentation on theme: "Special Journals: Sales and Cash Receipts Making Accounting Relevant In a merchandising business, revenue from sales fuels business operations. Making."— Presentation transcript:

1 Special Journals: Sales and Cash Receipts Making Accounting Relevant In a merchandising business, revenue from sales fuels business operations. Making Accounting Relevant In a merchandising business, revenue from sales fuels business operations. What tactics do businesses in your area use to increase sales?

2 Section 1The Sales Journal What You’ll 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 accounts receivable subsidiary ledger accounts.  How to foot, prove, total, and rule the sales journal.  How to post column totals from the sales journal to the general ledger. What You’ll 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 accounts receivable subsidiary ledger accounts.  How to foot, prove, total, and rule the sales journal.  How to post column totals from the sales journal to the general ledger.

3 Why It’s Important The use of the sales journal provides a systematic method of keeping track of sales on account. Why It’s Important The use of the sales journal provides a systematic method of keeping track of sales on account. Section 1The Sales Journal (cont'd.) Key Terms  special journals  sales journal  footing Key Terms  special journals  sales journal  footing

4 Section 1The Sales Journal (cont'd.) Special Journals Special journals have amount columns used to record debits and credits to specific general ledger accounts. Special Journals Special journals have amount columns used to record debits and credits to specific general ledger accounts. Sales Journalsales of merchandise on account Sales Journalsales of merchandise on account Cash Receipts Journalreceipt of cash Cash Receipts Journalreceipt of cash Purchases Journalpurchase of any asset on account Purchases Journalpurchase of any asset on account Cash Payments Journalpayment of cash, including payments by check Cash Payments Journalpayment of cash, including payments by check JournalTransaction JournalTransaction

5 The Sales Journal The sales journal is a special journal used to record sales of merchandise on account. The Sales Journal The sales journal is a special journal used to record sales of merchandise on account. Section 1The Sales Journal (cont'd.)  Record the amount of the merchandise sold on account  Record the amount of the merchandise sold on account  Record the amount of sales tax on the sale  Record the amount of sales tax on the sale  Record the total amount to be received from the customer on account

6 Recording Sales of Merchandise on Account Section 1The Sales Journal (cont'd.) 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.

7 Posting a Sales Journal Entry to the Accounts Receivable Subsidiary Ledger To keep the balances of the customer accounts current, sales journal transactions are posted daily to the accounts receivable subsidiary ledger. Posting a Sales Journal Entry to the Accounts Receivable Subsidiary Ledger To keep the balances of the customer accounts current, sales journal transactions are posted daily to the accounts receivable subsidiary ledger. Section 1The Sales Journal (cont'd.)

8 Footing, Totaling, Proving, and Ruling the Sales Journal Section 1The Sales Journal (cont'd.)

9 Posting the Total of the Sales Credit Column Next, transfer the amount in the Sales column to the general ledger. Posting the Total of the Sales Credit Column Next, transfer the amount in the Sales column to the general ledger. Section 1The Sales Journal (cont'd.)

10 Posting the Total of the Sales Tax Payable Credit Column Next, transfer the amount in the Sales Tax Payable column to the general ledger. Posting the Total of the Sales Tax Payable Credit Column Next, transfer the amount in the Sales Tax Payable column to the general ledger. Section 1The Sales Journal (cont'd.)

11 Posting the Total of the Accounts Receivable Debit Column The last amount to be transferred to the general ledger is the Accounts Receivable Debit column. Posting the Total of the Accounts Receivable Debit Column The last amount to be transferred to the general ledger is the Accounts Receivable Debit column. Section 1The Sales Journal (cont'd.)

12 Proving the Sales Journal at the End of a Page If a business has many transactions in one month, and it is impossible to fit them onto one journal page, the journal page must be totaled and ruled before a new page is started. Proving the Sales Journal at the End of a Page If a business has many transactions in one month, and it is impossible to fit them onto one journal page, the journal page must be totaled and ruled before a new page is started. Section 1The Sales Journal (cont'd.)

13 Check Your Understanding 1. What are the most commonly used special journals? Section 1The Sales Journal (cont'd.) 2. What does an account number written in parentheses under a column total mean?


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