Presentation on theme: "Learning Targets Chapter 10"— Presentation transcript:
1Learning Targets Chapter 10 I will be responsible for knowing and understanding the following concepts:Accounting Terms Related to the sales and cash receipts journalsAccounting Concepts and Practices related to the sales and cash receipts journalsJournalize Sales on Account using a sales journalJournalize Cash Receipts using a cash receipts journalRecording Sales Returns and Allowances using a general journalI will be able to listen to my instructor and take notes, be an active participant as needed.I will complete the Workbook Assignments for 10-1
2Expanding the Ledger-Special Journals Used to record similar types of transactions.If a transaction cannot be recorded in a special journal, the company records it in the general journal.LESSON 9-1
3How do we record sales in a Sales Journal? What are some things that you buy when you go out shopping?What different factors affect the final price that YOU pay at the register?
4What Kid of Account Would LESSON 10-14/13/2017NEW TERMSCustomer: a person or business to whom merchandise or services are soldSales tax: a tax on a sale, usually a percentage of sales-Every business collecting a sales tax needs accurate records of the amount of total sales and total sales tax collected.-The amount of sales tax collected is a business liability until paid to the government agency.What Kid of Account WouldSales Tax Be? A, L, or O.E.?
5SALES TAXSales Tax Payable – liability account where sales tax amounts are recorded.-A customer must pay the price of the goods PLUS the sales tax amount.
6SALES OF MERCHANDISE ON ACCOUNT A Sale of merchandise is either on account (charge sale) or for cash.Concept: Realization of Revenue - Sales increase the revenue of a business and should be recorded at the time of sale.Accounts Receivable – a general ledger asset account used to summarize the total due from all charge customers.
7SALES JOURNALSales Journal – used to record only sales of merchandise ON ACCOUNTSales Invoice – source document for recording a sale on account
9SALE ON ACCOUNTNovember 3. Sold merchandise on account to Village Crafts, $540.00, plus sales tax, $32.40; total, $ Sales Invoice No. 76.1234561. Write the date.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.6. Write the sales tax amount.
13Learning Targets 10-2I will be responsible for knowing and understanding the following concepts:Accounting terms related to cash receipts for a merchandising businessAccounting concepts as they relate to a cash receipts for a merchandising businessAccounting practices as they relate to the Cash Receipts JournalI will be able to listen to my instructor and take notes, be an active participant as needed.I will complete 10-2 Workbook activities as assigned
14AIM: How do we use a Cash Receipts journal when we receive cash? What are the different ways you pay for products when you go to the store?What happens when you swipe your credit card?Do you know of any stores that do not accept credit cards? Why?
15Expanding the Ledger-Special Journals Used to record similar types of transactions.If a transaction cannot be recorded in a special journal, the company records it in the general journal.LESSON 9-1
16Cash Sale – a sale in which cash is received for the total amount at the time of the transaction Credit card sale – a sale in which a credit card is used for the total amount of the sale at the time of the transaction ex. Visa, MasterCard, American Express- A customer who uses a credit card promises to pay the amount due for the transaction to the bank issuing the card- Merchandising businesses contract with a bank to process credit card sales and pay a percentage of those sales as a fee for credit card processing
17Point of Sale Terminal (POS) A computer used to collect, store and report all the information of a sales transaction. Uses a scanning device to scan the Universal Product Code (UPC) symbol on the item. The POS stores the number, description, price and quantity on hand of each item of merchandise.
18PROCESSING SALES TRANSACTIONS LESSON 10-24/13/2017PROCESSING SALES TRANSACTIONSUPC (Universal Product Code)Cash Register Receipt – does NOT show information about what merchandise was soldPoint-of-Sale (POS) Terminal Receipt – shows information(continued on next slide)
19PROCESSING SALES TRANSACTIONS Terminal Summary – a report that summarizes cash and credit card sales, used as a source document for recording salesBatch Report – contains a summary of ONLY credit card salesBatching out – the process of preparing a batch report of credit card sales
20CASH RECEIPTS JOURNALCash Receipts Journal – a special journal used to record only cash receipt transactionsSales Discount – a cash discount on sales taken by a customer, pays less than the invoice amount previously recorded.
21CASH AND CREDIT CARD SALES November 4. Recorded cash and credit card sales, $5,460.00, plus sales tax, $327.60; total, $5, Terminal Summary 34.24135671. Write the date.2. Place a check mark in the Account Title column.3. Write the terminal summary document number.4. Place a check mark in the Post. Ref. column.5. Write the sales amount.6. Write the sales tax amount.7. Write the cash amount.
22CASH RECEIPTS ON ACCOUNT November 6. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90.123451. Write the date.2. Write the customer’s name.3. Write the receipt number.4. Write the credit amount.5. Write the debit amount.
23JOURNALIZING CASH RECEIPTS ON ACCOUNT WITH SALES DISCOUNTS November 7. Received cash on account from Cumberland Center, $1,176.00, covering Sales Invoice No. 74 for $1,200.00, less 2% discount, $ Receipt No. 91.1234561. Write the date.4. Write the original invoice amount.2. Write the customer’s name.5. Write the amount of sales discount.3. Write the receipt number.6. Write the debit to cash.
24TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL
25Proving Cash Cash on hand at the beginning of the month $17,647.44 (Nov 1 balance of general ledger cash account)Plus total cash received during the month $38,668.80(Cash debit column total, cash receipts journal)Equals total $56,316.24Less total cash paid during the month $32,(Cash credit column total, cash payments journal, Chapter 9)Equals cash balance on hand at the end of the month $23,414.84Checkbook balance on the next unused check stub $23,414.84
28Learning Targets 10-3I will be responsible for knowing and understanding the following concepts:Accounting terms related to the sales and cash receipts journals for a merchandising businessAccounting practices as they relate to the sales and cash receipts journalsRecord sales returns and allowances using a general journalI will be able to listen to my instructor and take notes, be an active participant as needed.I will complete 10-3 Workbook activities as assigned
29AIM: What sales related transactions do we put in the general journal? LESSON 10-34/13/2017AIM: What sales related transactions do we put in the general journal?What can a customer do if they are dissatisfied with their purchase or if it damaged?What amount of money do we give back to them?What 2 types of transactions did we put in the general journal in the last chapter?
30NEW TERMSSales Return – credit allowed a customer for the sales price of returned merchandise (plus tax) resulting in a decrease in A/R, AS WELL AS a decrease in sales tax.Sales Allowance – credit allowed a customer for PART of the sales price of merchandise (plus tax) that is NOT returned, resulting in a decrease in A/R AS WELL AS a decrease in sales tax.Credit Memorandum – a form prepared by the vendor showing the amount deducted for returns and allowances (source document)Sales Returns and Allowances is a contra account to Sales, has a normal debit balance.
31CREDIT MEMORANDUM FOR SALES RETURNS AND ALLOWANCES Sales tax is listed separately and must be recorded as such in the transaction
32JOURNALIZING SALES RETURNS AND ALLOWANCES March 11. Granted credit to Village Crafts for merchandise returned, $58.50, plus sales tax, $3.51, from S160; total, $ Credit Memorandum No. 41.Sales tax is debited here because it was given back to the customer2413569871. Write the date.6. Write the sales tax amount.2. Write Sales Returns and Allowances.7. Write the accounts to be credited.3. Write CM and the credit memorandum number.8. Draw a diagonal line in the Post. Ref. column.4. Write the amount of the sales return.9. Write the total accounts receivable amount.5. Write Sales Tax Payable.
33Classwork Work Together 10-3: Text Page 287, Workbook Page 229 On Your Own 10-3: Text Page 287, Workbook Page 230
34HOMEWORKAPPLICATION PROBLEM 10-2: Text Page , Workbook Page 232APPLICATION PROBLEM 10-3: text Page 290, Workbook Page 233LESSON 10-3