More Review of Special Journals!

Chapter 16 Review CHAPTER 16 Question 1 Use (T) to indicate whether you would post only the column total, (E) to post each individual transaction, or (B) to post each to the subsidiary ledger and the column total to the controlling account in the general ledger. General Credit __________ Sales Credit __________ Sales Tax Payable Credit __________ Accounts Receivable Credit __________ Sales Discounts Debit __________ Cash in Bank Debit __________ Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Answer 1 General Credit: E Sales Credit : T Chapter 16 Review CHAPTER 16 Answer 1 General Credit: E Sales Credit : T Sales Tax Payable Credit: T Accounts Receivable Credit: B Sales Discounts Debit: T Cash in Bank Debit: T Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 16 Review CHAPTER 16 Question 2 A company has the following journals and ledgers: sales, cash receipts, purchases, cash payments, general, and an accounts receivable subsidiary ledger. For each of the following transactions, indicate (a) the correct journal and (b) whether the subsidiary ledger is used. sale for cash sale on credit payment of accounts payable purchase of equipment on credit cash receipt on account from customer sales for customers using bankcards cash received for sale of unneeded equipment cash discount taken on account by customer Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Answer 2 Chapter 16 Review CHAPTER 16 Sale for cash: (a) cash receipts Sale on credit: (a) sales (b) A/R subsidiary ledger Payment of accounts payable: (a) cash payments 4. Purchase of equipment on credit: (a) purchases Cash receipt on account from customer: (a) cash receipts (b) A/R subsidiary ledger Sales for customers using bankcards: (a) cash receipts Cash received for sale of unneeded equipment: (a) cash receipts Cash discount taken on account by customer: (a) cash receipts (b) A/R subsidiary ledger Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 16 Review CHAPTER 16 Question 3 In the cash receipts journal, why must you post every payment on account to the customer’s subsidiary account immediately? Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 16 Review CHAPTER 16 Answer 3 Most of the information in the cash receipts journal can be posted when you total the journal. However, the subsidiary ledger must be kept current and show the accurate amount owed by each customer in the event a customer inquires about his or her account status or that the current total is needed for some other reason. This also means that until the column total is posted to the controlling account, the total of the subsidiary ledger accounts and the controlling account in the general ledger will not agree. Glencoe Accounting Unit 4 Chapter 16 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.