Presentation on theme: "LESSON 10-1 Journalizing Sales on Account Using a Sales Journal"— Presentation transcript:
1 LESSON 10-1 Journalizing Sales on Account Using a Sales Journal 4/23/2017LESSON 10-1Journalizing Sales on Account Using a Sales Journal
2 Sales Tax/CustomersPurchases and sales of merchandise are the two major activities of a merchandising business.A person or business to whom merchandise or series are sold is called a customer.Hobby Shack sells merchandise to a variety of customers, including individuals, schools and churches.
3 Sales TaxLaws of most states and some cities require that a tax be collected from customers for each sale made.A tax on a sale of merchandise or services is called a sales tax.Sales tax rates are usually stated as a percentage of sales. Regardless of the tax rates used, accounting procedures are the same.
4 SALES TAXpage 270Every business collecting a sales tax needs accurate records of the amount of (1) total sales and (2) total sales tax collected. The amount of sales tax collected is a business liability until paid to the government agency.Sales Tax Payable-normal credit balanceLESSON 10-1
5 SALES OF MERCHANDISE ON ACCOUNT page 271A sale of merchandise may be (1) on account or (2) for cash. A sale of merchandise increases the revenue for a business. Regardless of when payment is made, the revenue should be recorded at the time of a sale, not on the date cash is received.Accounts Receivable-normal debit balanceLESSON 10-1
6 SALES JOURNALpage 272Hobby Shack uses a special journal to record only sales of merchandise on account transactions. A special journal used to record only sales of merchandise on account is called a sales journal.LESSON 10-1
8 SALE ON ACCOUNTpage 273November 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.LESSON 10-1
9 TOTALING, PROVING, AND RULING A SALES JOURNAL page 274LESSON 10-1
11 Journalizing Cash Receipts Using a Cash Receipts Journal LESSON 10-2Journalizing Cash Receipts Using a Cash Receipts Journal
12 Processing Sales Transactions A sale in which cash is received for the total amount of the sale at the time of the transaction is called a cash sale.A sale in which a credit card is used for the total amount of the sale at the time of transaction is called a credit card sale.A computer used to collect, store, and report all the information of a sales transaction is called a point-of-sale (POS) terminal.The report that summarizes the cash and credit card sales of a point-of-sale terminal is called a terminal summary.
13 Processing Credit Cards A report of credit card sales produced by a point-of-sale terminal is called a batch report.The process of preparing a batch report of credit card sales from a point-of-sale terminal is called batching out.
14 PROCESSING SALES TRANSACTIONS LESSON 10-24/23/2017PROCESSING SALES TRANSACTIONSpagesUPC (Universal Product Code)Cash Register ReceiptPoint-of-Sale (POS) Terminal Receipt(continued on next slide)LESSON 10-2
16 CASH RECEIPTS JOURNALpage 278A special journal used to record only cash receipt transactions is called a cash receipts journal.A cash discount on sales taken by a customer is called a sales discount.LESSON 10-2
17 CASH AND CREDIT CARD SALES page 279November 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.LESSON 10-2
18 CASH RECEIPTS ON ACCOUNT page 280November 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.LESSON 10-2
19 JOURNALIZING CASH RECEIPTS ON ACCOUNT WITH SALES DISCOUNTS page 282November 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.LESSON 10-2
20 TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL page 283LESSON 10-2
22 LESSON 10-3 Recording Transactions Using a General Journal 4/23/2017LESSON 10-3Recording Transactions Using a General Journal
23 Sales Returns and Allowances Credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor’s accounts receivable, is called a sales return.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, is called a sales allowance.A form prepared by the vendor showing the amount deducted for returns and allowances is called a credit memorandum.
24 CREDIT MEMORANDUM FOR SALES RETURNS AND ALLOWANCES page 285LESSON 10-3
25 JOURNALIZING SALES RETURNS AND ALLOWANCES page 286March 11. Granted credit to Village Crafts for merchandise returned, $58.50, plus sales tax, $3.51, from S160; total, $ Credit Memorandum No. 41.2413569871. 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.LESSON 10-3