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Chapter © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a.

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Presentation on theme: "Chapter © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a."— Presentation transcript:

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2 Chapter © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 12 Special Journals

3 Learning Objective © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Describe, explain the purpose of, and identify transactions recorded in special journals. 1

4 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Designed for recording only certain kinds of transactions Save time journalizing and posting transactions Transactions are entered on a single line Column totals are posted periodically A general journal is still needed for some transactions Special Journals

5 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Special Journals SPECIAL JOURNAL TRANSACTIONS Sales journal Sales on account Only sales “on account,”not cash sales.

6 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Special Journals SPECIAL JOURNAL TRANSACTIONS Sales journalSales on account Any transaction in which cash is received. Cash sales are recorded in this journal. Cash receipts journalCash receipts

7 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Special Journals SPECIAL JOURNAL TRANSACTIONS Sales journal Sales on account “ON ACCOUNT” purchases of MERCHANDISE only Cash receipts journal Cash receipts Purchases journal Purchases on account

8 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Special Journals SPECIAL JOURNAL TRANSACTIONS Sales journalSales on account Cash receipts journalCash receipts Purchases journal Purchases on account Cash payments journalCash payments Any transaction in which cash is paid.

9 Learning Objective © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2 Describe and use the sales journal.

10 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. April 4 Made sale no. 133C on account to Enrico Lorenzo, $1,520 plus $76 sales tax April 10 Made sale no. 134C on account to Brenda Myers, $440 plus $22 sales tax April 18 Made sale no. 105D on account to Edith Walton, $980 plus $49 sales tax Sales Transactions

11 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. April 21 Made sale no. 202B on account to Susan Chang, $620 plus $31 sales tax April 24 Made sale no. 162A on account to Heidi Schwitzer, $1,600 plus $80 sales tax Sales Transactions (cont.) Let’s review the general journal entries for these transactions.

12 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Entered In General Journal DATEDESCRIPTIONPRDEBITCREDIT 1 2 3 4 5 6 7 8 9 10 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 Sales 1,520 00 Sales Tax Payable 76 00 Sale No. 133C Four lines are used to prepare one journal entry!! 20--

13 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Entered In General Journal DATEDESCRIPTIONPRDEBITCREDIT 1 2 3 4 5 6 7 8 9 10 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 Sales 1,520 00 Sales Tax Payable 76 00 Sale No. 133C 10Accts. Receivable/B. Myers 462 00 440 00 Sales Sales Tax Payable Sale No. 134C 22 00 20--

14 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Entered In General Journal (Cont.) DATEDESCRIPTIONPRDEBITCREDIT Accts. Receivable/E. Walton12 13 14 15 16 17 18 19 20 21 18 Sales Sales Tax Payable 1,029 00 980 00 49 00 Sale No. 105D Accts. Receivable/S. Chang Sales Sales Tax Payable Sale No. 202B 651 00 620 00 31 00 21

15 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Entered In General Journal (cont.) DATEDESCRIPTIONPRDEBITCREDIT Accts. Receivable/H. Schwitzer 23 24 25 26 27 28 29 30 31 32 24 Sales Sales Tax Payable 1,680 00 1,600 00 80 00 Sale No. 162A All the entries involved the same three accounts!!

16 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Provides a column for each account involved in “sales on account” transactions: Accounts Receivable Debit Sales Credit Sales Tax Payable Credit A sale is recorded in the sales journal by entering the following information: Date Sales number Customer (to whom sold) Dollar amounts Sales Journal

17 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Journal DateTo Whom SoldPR Accts. Receivable Debit/Sales Credit 1 2 3 4 5 6 7 8 9 10 Sale No. A company that does not charge sales tax, such as a wholesaler, will use a single-column sales journal.

18 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Journal DateTo Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr. 4 133C Sales Credit Enrico Lorenzo 1,5961,520 76 The whole transaction is recorded on ONE line. Account names are not entered.

19 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Sales Journal DateTo Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr. 133C Sales Credit Enrico Lorenzo 1,5961,520 76 4 10134C Brenda Myers46244022 18 105D Edith Walton1,02998049 202B Susan Chang651 620 31 24 162A Heidi Schwitzer 1,680 1,600 80 Now let’s look at posting from the sales journal. 18 21

20 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr. 133C Sales Credit Enrico Lorenzo 1,5961,520 76 4 10 134C Brenda Myers46244022 18 105D Edith Walton1,02998049 21 202B Susan Chang651 620 31 24 162A Heidi Schwitzer 1,680 1,600 80 Step #1a Total the amount columns. 5,418 5,160 258

21 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal DateTo Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,5961,520 76 4 10 134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21 202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #1b Verify that the total of the debit column equals the total of the credit columns. 5,418 5,160 258

22 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,5961,520 76 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 5,418 5,160 258 Debits $5,418 Credits $5,418 1

23 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134C Brenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162A Heidi Schwitzer 1,680 1,600 80 Step #1c Rule the columns. 5,418 5,160 258

24 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Let’s post the Accounts Receivable total. 5,418 5,160 258

25 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting The Sales Journal To The General Ledger Account: Account No. DATEITEM PRPR DR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE122 20-- Apr. 1 12,000 30 Balance Step #2 Enter the date.

26 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting The Sales Journal To The General Ledger Account: Account No. DATEITEM PRPR DR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE122 20-- Apr.1 12,000 30 Balance Step #3 Enter the amount. 5,418

27 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting The Sales Journal To The General Ledger Account: Account No. DATEITEM PRPR DR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr.1 12,000 30 Balance Step #4 Enter the new balance. 5,418 17,418

28 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting The Sales Journal To The General Ledger Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr.1 12,000 30 Balance Step #5 Enter the initial “S” and the journal page number. 5,418 17,418 S6

29 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #6 Enter the account number below the column total. 5,418 5,160 258 (122)

30 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal DateTo Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Steps #2 – #6 will be repeated for the Sales and Sales Tax Payable columns. 5,418 5,160 258 (122)(401)(231)

31 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal DateTo Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Each transaction must also be posted to the accounts receivable ledger. 5,418 5,160 258 (122)(401)(231) 10

32 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Accounts Receivable Ledger Name: DATEITEMPRDEBITCREDITBALANCE Enrico Lorenzo Apr. 1,596 4 Address: 5240 Tousley Court, Indianapolis, IN 46224- 5678 1,596S6 Step #1: Enter the date. Step #2: Enter the amount. Step #3: Update the balance. Step #4: Enter the initial “S” and the journal page number in the PR column.

33 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom Sold PR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 “ ” is entered to indicate the transaction has been posted to the accounts receivable ledger. 5,418 5,160 258 (122) (401) (231)

34 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Sales Journal Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 Sale No. 20-- Apr.133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 The other sales are posted to the accounts receivable ledger in the same manner. 5,418 5,160 258 (122)(401)(231) 10

35 Learning Objective © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3 Describe and use the cash receipts journal.

36 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Used to record only cash receipt transactions Includes separate columns for: Cash Debit Bank Credit Card Expense Debit Accounts Receivable Credit Sales Credit Sales Tax Payable Credit General Credit Cash Receipts Journal

37 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit EXAMPLE: April 14, received cash on account from Enrico Lorenzofor sale no. 133C, $1,596.

38 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Step #1 Enter the date. Apr. 20-- 14

39 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Step #2 Enter the name of the account credited. Apr. 20-- 14 Enrico Lorenzo

40 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) DateAccount CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo This column is used for two purposes: 1.To identify the customer name for any collection on account. This column is used whenever the Accounts Receivable Credit column is used. 2.To enter the appropriate account name whenever the General Credit column is used.

41 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Step #3 Enter the dollar amount. Apr. 20-- 14 Enrico Lorenzo1,596

42 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596

43 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20 Brenda Myers 462 Cash was also received on account on April 20th and 28th.

44 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462

45 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20 Brenda Myers 462 28 Edith Walton 1,029

46 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029

47 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20 Brenda Myers 462 28 Edith Walton1,029 Now let’s journalize cash sales for April 30 of $3,600 plus tax of $180.

48 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20 Brenda Myers 462 28 Edith Walton1,029 This column is left blank for cash sales. 30

49 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 3,600180 + = 3,780 Total Credits = Total Debits

50 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20 Brenda Myers 462 28 Edith Walton1,029 Bank credit card sales are similar to cash sales; no entry is made in the Account Credited column. 30

51 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 Bank credit card sales of $2,500 were made this month. 2,500

52 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 Sales tax on these sales was $125. 2,500 125

53 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 The service charge on these bank credit card sales was $100. 2,500 125100

54 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 The cash received was $2,525. [($2,500 sales + $125 tax) – $100 service charge] 2,500 1251002,525

55 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Example: April 30, received cash for rent revenue, $600. 30 Apr. 20--

56 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 We need to credit Rent Revenue and debit Cash. 30

57 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account Credited PR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Since there is no column for Rent Revenue, we must use the General Credit column. 30 600 1 2 3 4 5 6 7 8 9 10

58 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) Date Account CreditedPR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 When the General Credit column is used, the Account Credited column must identify the specific general ledger account affected. 30 600 Rent Revenue 1 2 3 4 5 6 7 8 9 10

59 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 1 2 3 4 5 6 7 8 9 10

60 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Left Side) DateAccount CreditedPR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Borrowing money would be recorded in a similar manner. 30 600 Rent Revenue 30 Notes Payable 3,000 AAoA1AAoA1 2 3 4 5 6 7 8 9 10

61 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Receipts Journal (Right Side) Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 1 2 3 4 5 6 7 8 9 10

62 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Date Account Credited PR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton 1,029 30 600 Rent Revenue 30 Notes Payable 3,000 On a daily basis, the amounts in the General Credit column are posted. 1 2 3 4 5 6 7 8 9 10

63 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal To The General Ledger Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. RENT REVENUE412 20-- Apr. 1 1,800 30 Balance “CR” for Cash Receipts Journal 600 2,400 CR7

64 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Date Account CreditedPR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 General ledger account number 30 600 Rent Revenue 30 Notes Payable 3,000 41 2 1 2 3 4 5 6 7 8 9 10

65 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Date Account CreditedPR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Notes Payable is posted in the same manner. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 1 2 3 4 5 6 7 8 9 10

66 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal DateAccount CreditedPR General Credit Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 At the end of the month, the columns are totaled. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087 1 2 3 4 5 6 7 8 9 10

67 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 Next, we verify that the debit columns equal the total of the credit columns. 1 2 3 4 5 6 7 8 9 10

68 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 $3,600 + $3,087 + $6,100 + $305 = $13,092 Credits 1 2 3 4 5 6 7 8 9 10

69 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 $100 + $12,992 = $13,092 Debits DEBITS = CREDITS!!! 1 2 3 4 5 6 7 8 9 10

70 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 Each column total (except the General Credit column) is posted at the end of the month. 1 2 3 4 5 6 7 8 9 10

71 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal To The General Ledger Account: Account No. DATEITEM PR DR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 1 12,000 30 Balance “CR” for Cash Receipts Journal 5,418 17,418 S6 30 CR7 3,087 14,331

72 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) The account number indicates that the total was posted. 1 2 3 4 5 6 7 8 9 10

73 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) (401) (231)(513)(101) Remaining columns are posted in the same manner. 1 2 3 4 5 6 7 8 9 10

74 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,525 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) (401) (231)(513)(101) “( )” indicates the column total is not posted. ( )

75 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting To The Cash Receipts Journal DateAccount CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Postings to the subsidiary accounts receivable ledger are made daily. 30 600 Rent Revenue 30 Notes Payable 3,000 412 20 1 3,600 3,087

76 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal To The Accounts Receivable Ledger Name: DATEITEMPRDEBITCREDITBALANCE Enrico Lorenzo 20-- Apr. 1,596 4 Address: 5240 Tousley Court, Indianapolis, IN 46224- 5678 1,596 S6 14 1,596 CR7 —

77 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal DateAccount Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087 “ ” indicates the transaction was posted to the accounts receivable subsidiary ledger.

78 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal DateAccount CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087 The payments by Brenda and Edith are posted in the same manner.

79 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Receipts Journal Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 Accts. Rec. Credit Apr. 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087 “ ” is entered into the PR column for cash sales and bank credit card sales.

80 Learning Objective © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 4 Describe and use the purchases journal.

81 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Used to record only purchases of merchandise on account Cash purchases would be recorded in the cash payments journal There are two types of formats: Single column Purchases Debit/Accounts Payable Credit Three columns Purchases Debit Freight-In Debit Accounts Payable Credit Purchases Journal

82 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. For our example, we will use a single-column purchases journal.

83 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. EXAMPLE: April 4, purchased merchandise from Compucraft, Inc., $3,300. Invoice no. 631, dated April 2, n/30. 20-- Apr. 4 631Compucraft, Inc. 3,300

84 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. All purchases transactions are journalized in the same manner. 20-- Apr. 4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11 804EZX Corp. 8,700 17 611 Printpro Corp. 800 23 1465 Televax, Inc.5,300

85 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. At the end of the month, the column is totaled, ruled, and posted to the general ledger accounts. 20-- Apr. 4 631 Compucraft, Inc. 3,300 8 927D Datasoft2,500 11 804 EZX Corp. 8,700 17 611 Printpro Corp. 800 231465 Televax, Inc.5,300 20,600

86 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal To The General Ledger Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. PURCHASES 501 20-- Apr. 1 17,400 30 Balance “P” for Purchases Journal 20,600 38,000 P8

87 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. 20-- Apr. 4 631 Compucraft, Inc. 3,300 8 927D Datasoft2,500 11804 EZX Corp. 8,700 17611 Printpro Corp.800 23 1465 Televax, Inc.5,300 20,600 (501) The account number indicates that the column total has been posted.

88 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal To The General Ledger Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS PAYABLE202 20-- Apr.1 4,800 30 Balance 20,600 25,400 P8

89 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. 20-- Apr. 4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501) (202) Transactions are posted to the accounts payable ledger on a daily basis.

90 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal To The Accounts Payable Ledger Name: DATEITEMPRDEBITCREDIT BALANCE Compucraft, Inc. 20-- Apr. 3,300 4 Address: 2100 West Main Street, Muncie, IN 47304- 8139 3,300 P8

91 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. 20-- Apr. 4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501)(202) “ ” is entered in the PR column when posting is completed.

92 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Purchases Journal Date From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 Invoice No. 20-- Apr. 4 631 Compucraft, Inc. 3,300 8 927D Datasoft2,500 11804 EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc. 5,300 20,600 (501)(202) The remaining transactions are posted in the same manner.

93 Learning Objective © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5 Describe and use the cash payments journal.

94 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Used to record only cash payments transactions Every transaction in the journal will involve a credit to the cash account Columns are set up in the journal for the most commonly affected accounts in cash payments transactions Cash Payments Journal

95 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) DateAccount Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 EXAMPLE: April 2, payment of rent, $2,400. Check No.

96 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) DateAccount DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 All cash payments (except those from petty cash) should be made by check for good internal control. 20- - Apr. 2 Check No. 307

97 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 This column is used for two purposes: 1. To identify a supplier name for any payment on account. This column is used whenever the Accounts Payable Debit column is used. 2.To enter the appropriate account name whenever the General Debit column is used. 20- - Apr. 2 Check No. 3072,400Rent Expense

98 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400

99 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) DateAccount DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 EXAMPLE: April 4, merchandise was purchased for cash, $1,400. 20-- Apr.2 Check No. 307 2,400Rent Expense 4308

100 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400

101 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) DateAccount Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 EXAMPLE: April 10, payment was made on account, $4,800. 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4 308 10 309 B. B. Small

102 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800

103 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B. B. Small 14 310Notes Payable EXAMPLE: April 14, payment was made on a note payable, $2,000. 2,000

104 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000

105 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4308 10309 B. B. Small 14 310Notes Payable EXAMPLE: April 22, owner withdrew cash for personal use, $1,600. 2,000 22 311 Gary L. Fishel, Drawing 1,600

106 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600

107 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Left Side) DateAccount Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr.2 Check No. 307 2,400Rent Expense 4308 10309 B. B. Small 14 310Notes Payable EXAMPLE: April 24, made payment on account within the discount period. 2,000 22 311Gary L. Fishel, Drawing 1,600 24 312EZX Corp.

108 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cash Payments Journal (Right Side) 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613

109 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr.2 Check No. 307 2,400 Rent Expense 4308 10 309 B. B. Small 14 310Notes Payable On a daily basis, the amounts in the General Debit column are posted. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp.

110 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4308 10 309 B. B. Small 14 310Notes Payable The initial “CP” is entered in the ledger account’s PR column, and the account number is entered in the journal’s PR column. 2,000 22311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312

111 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B. B. Small 14 310Notes Payable At the end of the month, the columns are totaled, the equality of debits and credits is verified, and the totals are posted to the general ledger. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000

112 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813 6,000 + 13,500 + 1,400 = 20,900 87 + 20,813 = 20,900

113 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813 “( )” indicates the column should not be posted. ( )

114 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal 1 2 3 4 5 6 7 8 9 10 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813 Account numbers indicate the totals were posted. (202)(501)(501.2)(101) ( )

115 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4 308 10 309 B. B. Small 14 310 Notes Payable Transactions affecting the accounts payable ledger are posted daily. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000

116 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4 308 10 309 B. B. Small 14 310 Notes Payable “ ” is entered to indicate the transaction has been posted. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000

117 © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Posting From The Cash Payments Journal Date Account Debited PR General Debit 1 2 3 4 5 6 7 8 9 10 20-- Apr. 2 Check No. 307 2,400 Rent Expense 4 308 10 309 B. B. Small 14 310 Notes Payable “ ” is also entered for transactions that do not require individual postings. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000


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