© 2014 Cengage Learning. All Rights Reserved. Procedures ●With a partner, write down the step-by-step procedures of when you approach the cash register at a grocery store SLIDE 1

© 2014 Cengage Learning. All Rights Reserved. Processing Sales Transactions ●A sale in which the customer pays for the total amount of the sale at the time of the transaction is called a cash sale. ●Credit card and debit card sales are treated as cash sales because the business receives its cash in a very short time. ●A specialized computer used to collect, store, and report all the information about a sales transaction is called a point-of- sale (POS) terminal. SLIDE 2 LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Processing Sales Transactions ●When processing sales, sales clerk uses scanning device to scan Universal Product Code (UPC) symbol on item ●POS terminal matches number represented by UPC symbol with merchandise number to obtain description and price of merchandise ●The report that summarizes the cash and credit card sales of a point-of-sale terminal is called a terminal summary. ●Also known as Z-tape SLIDE 3 LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Terminal Summary ●Credit card will include both debit and credit cards in this chapter SLIDE 4 LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Processing Credit Cards ●Sales information for credit card sales is stored in the POS terminals. ●A report of credit card sales produced by a point- of-sale terminal is called a batch report. ●A batch report can be detailed, showing every credit card sale. ●Or, the batch report can be a summary, showing only the number and total of sales by credit card type. ●The process of preparing a batch report from a point-of-sale terminal is called batching out. SLIDE 5 LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Batch Report SLIDE 6 LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Closure ●Fist of Five: 1.No idea 2.Somewhat unclear 3.Comfortable 4.Would test well and comfortable 5.Can teach this material SLIDE 7

© 2014 Cengage Learning. All Rights Reserved. Frame of Reference: ●Focus on topic in frame on center desk: ●Write down ideas you have regarding procedures to be followed for topic ●How do you have this knowledge that have led you to believe this? ●After writing, share ideas with other classmates in circle SLIDE 8

© 2014 Cengage Learning. All Rights Reserved. Example ●ThreeGreen has contract with CreditCorp to process credit card sales ●ThreeGreen batches out and POS terminal transmits summary batch report to CreditCorp ●CreditCorp combine reports of all customers and submits to VISA or MasterCard (credit card associations) ●VISA or MasterCard collects funds from banks that issued cards and transfers funds to CreditCorp, who then deposits money into account of ThreeGreen within two-to-three business days SLIDE 9

© 2014 Cengage Learning. All Rights Reserved. Visual ●Put the pieces of paper in proper order for when businesses “batch out” ●Be sure to answer the questions on the three pieces of paper that are italicized SLIDE 10

© 2014 Cengage Learning. All Rights Reserved. Pair & Share ●What is the purpose of each special amount column within the cash receipts journal? SLIDE 11

© 2014 Cengage Learning. All Rights Reserved. Cash Receipts Journal ●A cash receipts journal is a special journal used to record only cash receipt transactions. ●A cash discount on a sale taken by the customer is called a sales discount. SLIDE 12. LO4 Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Cash and Credit Card Sales ●Terminal summaries serve as the source document for weekly cash and credit card sales transactions ●Total of terminal summary recorded as single cash sale transaction SLIDE 13

© 2014 Cengage Learning. All Rights Reserved. Cash and Credit Card Sales ●Most businesses batch out at the end of every business day ●Cash from sales deposited directly in bank ●Cash from credit card sales received two or three days later when transferred into business’ account ●These two deposits equal total sales reported on terminal summary SLIDE 14

© 2014 Cengage Learning. All Rights Reserved. Cash and Credit Card Sales SLIDE 15 November 4. Recorded cash and credit card sales, $6,280.00, plus sales tax, $376.80; total, $6, Terminal Summary 35. LO4 Lesson Terminal Summary Number 1 1 Date 6 6 Sales Tax Payable 2 2 Check Mark Cash 6, Sales 6, Cash Sales Tax Payable Check Mark 5 5 Sales

© 2014 Cengage Learning. All Rights Reserved. Cash Receipts on Account ●Receipts prepared in duplicate ●Original receipt given to customer ●Copy of receipt used as source document for cash receipt on account transaction ●Accounting Concept Objective Evidence SLIDE 16

© 2014 Cengage Learning. All Rights Reserved. Cash Receipts on Account SLIDE 17 LO5 Lesson 10-3 November 4. Received cash on account from Edmonds Hospital, $2,516.80, covering S448. Receipt No Cash 2, Accounts Payable 2, Receipt Number 1 1 Date 5 5 Cash Received 4 4 Sales Invoice Amount 2 2 Customer’s Name

© 2014 Cengage Learning. All Rights Reserved. Calculating Cash Receipts on Account with Sales Discount SLIDE 18 LO5 Lesson 10-3 Sales Invoice Amount Sales Discount Rate Sales Discount × = $1, %$29.00× =

© 2014 Cengage Learning. All Rights Reserved. Journalizing Cash Receipts on Account with Sales Discounts SLIDE 19 LO5 Lesson 10-3 November 5. Received cash on account from Palmer Dentistry, $1,421.00, covering Sales Invoice No. 462 for $1,450.00, less 2% discount, $ Receipt No Receipt Number 1 1 Date 5 5 Sales Discount 2 2 Customer’s Name Cash 1, Accounts Receivable 1, Sales Discount Cash Received 4 4 Original Sales Amount

© 2014 Cengage Learning. All Rights Reserved. The Audit Challenge ●Those who record answer on white board first and within shortest amount of time, while answering correctly, wins ●Individual Challenge now, with group challenge on the way SLIDE 20

© 2014 Cengage Learning. All Rights Reserved. Lesson 10-3 Audit Your Understanding 1.How does a POS terminal determine the price of an item? SLIDE 21 ANSWER Before any sale is entered, the number, description, price, and quantity on hand of each item of merchandise are stored in the POS terminal. Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Lesson 10-3 Audit Your Understanding 2.What are the two types of batch reports? SLIDE 22 ANSWER A batch report can be detailed, showing each credit card sale, or a summary of the number and total of sales by credit card type. Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Lesson 10-3 Audit Your Understanding 3.What is meant by 2/10, n/30 credit terms? SLIDE 23 ANSWER If a customer pays the amount owed within 10 days, the sales invoice amount is reduced 2%. Otherwise, the net amount is due in 30 days. Lesson 10-3

© 2014 Cengage Learning. All Rights Reserved. Class Activity ●10-3 Work Together ●10-3 On-Your-Own SLIDE 24

© 2014 Cengage Learning. All Rights Reserved. Numbered Heads Together ●Work in teams of five to complete 10-1 Application Problem ●If everyone receives 100% and your team completes it faster than the other team, your team wins ●Not only do you need to receive 100% across the entire team, but you also need to make sure each team member can explain the process of posting from the sales journal to either the General Ledger or Subsidiary Ledger ●Once we are finished, we will follow the same procedure for 10-2 & 10-3 Application Problems SLIDE 25

© 2014 Cengage Learning. All Rights Reserved. Closure ●Pass the Rock: Pass the ball to one another around the class ●Mention an aspect of today’s lesson that you learned ●No repeats! SLIDE 26