1. Special Journals: Sales and Cash Receipts
Chapter 9 2

2. account in a sales journal.
Learning Objective 1
Journalizing sales on
account in a sales journal.

3. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Gross sales
= Amount of units sold
× Sales price per unit
Amount is credited to
the Revenue account.
Normal balance is a credit.

4. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Assume that Chou’s Toy
Shop had $3,000 in sales.
$1,800 were cash sales
and $1,200 were charges.
A customer received a $10 price
reduction for defective merchandise.
How can these transactions be recorded?

5. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Accounts Affected Category Rules
Cash Asset Dr. 1,800
Accounts Receivable Asset Dr. 1,200
Sales Revenue Cr. 3,000
July 18
Cash ,800
Accounts Receivable 1,200
Sales ,000
To record sales for July 18

6. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Sales returns and allowances =
Amount allowed for defective merchandise
Amount is debited in the journal entry.
Normal balance is a debit.

7. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Accounts Affected Category Rules
Sales Returns and Contra Dr. 10
Allowances revenue
Accounts Receivable, Asset Cr. 10
Michelle Reese
Accounts Receivable
1,200 10

8. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
What is a sales discount?
It is a percent decrease in the amount
collected from a credit customer.

9. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
What is the meaning of the term 2/10, n/30?
It means a customer will be granted a 2%
discount if the account is paid in 10 days.
Otherwise, the full amount (n = net)
is to be paid in 30 days.

10. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Sales Discounts
July 24
Cash
Sales Discount
Accounts Receivable, Michelle Reese

11. Learning Unit 9-1 (Seller’s View of a Merchandise Company)
Sales Tax Payable
What is sales tax payable?
It is a percent multiplied times the gross
amount of the sale collected from customers.
The business has a liability to the taxing
authority for the amounts collected.

12. Learning Objectives 2 and 3
Posting from a sales journal
to the general ledger.
Recording to the accounts
receivable subsidiary ledger
from a sales journal.

13. Learning Unit 9-2 (Special Journals)
The sales journal records sales of
merchandise on account.
The cash receipts journal records
receiving cash from any source.
The purchases journal records buying
merchandise or other items on account.
The cash payments journal records payments.

14. Learning Unit 9-2 (Special Journals)
A separate record for each credit
customer must be set up.
Subsidiary Ledger

15. Learning Unit 9-2 (Special Journals)
Recorded sales are posted in total to the Sales
account and the Accounts Receivable account.
They are also recorded as debits
to individual customer accounts.

16. Learning Unit 9-2 (Special Journals)
Roe Company
Mel’s Dept. Store
Hal’s Clothing
Bevans
Company
Accounts Receivable
Subsidiary Ledger
Sales Returns
and Allowances
Sales Discounts
Sales
Inventory
Accounts
Receivable
Cash
Partial General Ledger

17. Preparing, journalizing,
Learning Objective 4
Preparing, journalizing,
recording, and posting
a credit memorandum.

18. Learning Unit 9-3 (The Credit Memorandum)
What is a credit memorandum?
It shows amounts that were deducted
from the balance the customer owes.
They are contra-revenue accounts
with a normal debit balance.
These are recorded in the general journal
and posted to a subsidiary ledger.

19. Learning Unit 9-3 (The Credit Memorandum)
Sales Returns and Allowances
Sales Returns and
Credit Account PR Allowances – Dr.
Date Memo No. Credited Accts. Rec. – Cr.
200x
April Bevans 

20. Journalizing and posting transactions using a cash
Learning Objective 5
Journalizing and posting
transactions using a cash
receipts journal, as well
as recording to the accounts
receivable subsidiary ledger.

21. Learning Unit 9-4 (Cash Receipts Journal)
The cash receipts journal records
the receipt of cash from any source.
The number of columns
varies with each business.
The cash receipt journal
speeds up the posting process.

22. Learning Unit 9-4 (Cash Receipts Journal)
Debit Column
Cash
Sales Discount
Credit Column
Accounts Receivable
Sales
Sundry

23. End of Chapter 9