Presentation on theme: "Recording Sales and Cash Receipts Advanced Accounting Audrey Marshall, Director."— Presentation transcript:
Recording Sales and Cash Receipts Advanced Accounting Audrey Marshall, Director
Chapter Overview Recording Sales on Account Using a Sales Journal Recording Cash Receipts Using a Cash Receipts Journal Recording Transactions Using a General Journal Recording International Sales
Special Journals Use Special Journals: – When a business has a large number of transactions – Need for efficiency of operation – Need Accuracy and Timeliness
Summary of Special Journals Purchases Journal Purchases Journal Cash Payments Journal Cash Payments Journal General Journal General Journal Sales Journal Sales Journal Cash Receipts Journal Cash Receipts Journal Purchases on AccountSales on Account Paid with CashReceived Cash Businesses with a small number of daily transactions can record all entries in one journal.
Journalizing Sales on Account Accounts Receivable – used to record sales to customers on account Sales Journal (abbreviate with an “S”) – Used to record only sales on account Invoice-a form prepared in duplicate to document a sale on account. – Original is provided to customer – Copy is kept by the business as a source document to journalize the sale on account transaction. Sales Tax-amount owed to the government – Record sales tax as a liability Realization of Revenue: Recording revenue when merchandise is sold.
Calculating Cash Receipts on Account with Sales Discount Sales Invoice Amount x Sales Discount Rate = Sales Discount Sales Invoice Amount x Sales Tax Rate = Sales Tax Deduction Total Invoice Amount - Sales Discount - Sales Tax Reduction = Cash Received
Recording Cash Receipts Using a Cash Receipts Journal Journalizing Cash Receipts on Account with Sales Discounts-pg 497 Posting from a Cash Receipts Journal to an A/R Leger-pg 498 Posting Totals of the Special Amount Columns of a Cash Receipts Journal to a General Ledger-pg 499
Recording Transactions Using a General Journal Transactions Affecting A/R Accounts should be listed in the General Journal when: – Journalizing Sales Returns and Allowances – Journalizing Correcting Entries Affecting Customer Accounts
Credit Memorandums for Sales Returns and Allowances Sales Return –credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor’s a counts receivable Sales Allowance -Credit allowed a customer for part of the sales price of merchandise that is not returned resulting in a decrease in the vendor’s accounts receivable. Credit Memorandum -a form prepared by the vendor showing the amount deducted for returns and allowances
Summary of Posting Posting from a General Journal Preparing a Schedule of Accounts Receivable Order of Posting from Special Journals – Sales Journal – Purchases Journal – General Journal – Cash Receipts Journal – Cash Payments Journal
Recording International Sales Exports-goods or services shipped out of a seller’s home country to a foreign country. Imports-goods or services brought from a foreign country and brought into a buyer’s home country.
Processing an International Sale Contract of Sale-a document that details all the terms agreed to by seller and buyer for a sales transaction Letter of credit-a letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount provided stated conditions are met. Bill of lading-a receipt signed the authorized agent of a transportation company for merchandise received that also serves as a contract for the deliver of the merchandise Commercial invoice-a statement prepared by the seller of merchandise addressed to the buyer showing a detailed listing and description of merchandise sold. Sight draft-a draft payable on site when the holder presents it for payment. Time draft-a draft that is payable at a fixed or determinable future time after it is accepted. Trade acceptance-a form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money usually at a stated time in the future.
Journalizing International Sales and Time Drafts Journalizing International Sales-pg 508 Journalizing Time Drafts –pg 509
Summary Sales on account are entered in the Sales Journal and Cash Receipts in the Cash Receipts Journal Two kinds of Cash Receipts are entered in the cash receipts journal – Cash receipts on account, with and without sales discounts – Cash receipts for other transactions that do not affect Accounts Receivable.