1. © 2014 Cengage Learning. All Rights Reserved. Learning Objectives © 2014 Cengage Learning. All Rights Reserved. LO4Record cash and credit card sales using a cash receipts journal. LO5Journalize cash receipts on account using a cash receipts journal.

2. © 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. ●A UPC (universal product code) on an item is scanned and the information is processed by the POS terminal. SLIDE 2 LO4 Lesson 10-3

3. © 2014 Cengage Learning. All Rights Reserved. Processing Sales Transactions ●The POS terminal processes the information and displays the price of the merchandise. ●Once all merchandise has been scanned, the form of payment is entered by the clerk. ●The POS terminal determines if a card is a debit card or credit card ●If cash is used, the POS terminal computes the amount of change ●The POS system produces a receipt that contains detailed information about the sale. ●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

4. © 2014 Cengage Learning. All Rights Reserved. Terminal Summary SLIDE 4 LO4 Lesson 10-3

5. © 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

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

7. © 2014 Cengage Learning. All Rights Reserved. Cash Receipts Journal ●A cash receipts journal is a special journal used to record only cash receipt transactions. ●The cash receipts journal has many special amounts columns for frequently occurring transactions ●Businesses can offer a discount to customers who purchase on credit to encourage early payment ●A cash discount on a sale taken by the customer is called a sales discount. ●Cash discounts lower the amount received by the business SLIDE 7. LO4 Lesson 10-3

8. © 2014 Cengage Learning. All Rights Reserved. Cash and Credit Card Sales ●A business decides when it will batch out, deposit cash and record sales in the sales journal – typically this is done daily ●Cash sales is deposited to the bank ●Credit card sales is received two or three days later ●The two deposits equal the sales reported on the terminal summary SLIDE 8 LO4 Lesson 10-3

9. © 2014 Cengage Learning. All Rights Reserved. Cash and Credit Card Sales SLIDE 9 November 4. Recorded cash and credit card sales, $6,280.00, plus sales tax, $376.80; total, $6,656.80. Terminal Summary 35. LO4 Lesson 10-3 3 3 Terminal Summary Number 1 1 Date 6 6 Sales Tax Payable 2 2 Check Mark Cash 6,656.80 Sales 6,280.00 7 7 Cash Sales Tax Payable 376.80 4 4 Check Mark 5 5 Sales

10. © 2014 Cengage Learning. All Rights Reserved. Cash Receipts on Account ●A transaction in which cash is received on account will increase the balance in Cash and decrease the future amount to be collected from the customer (Accounts Receivable) SLIDE 10 LO5 Lesson 10-3

11. © 2014 Cengage Learning. All Rights Reserved. Cash Receipts on Account SLIDE 11 LO5 Lesson 10-3 November 4. Received cash on account from Edmonds Hospital, $2,516.80, covering S448. Receipt No. 610. Cash 2,516.80 Accounts Payable 2,516.80 3 3 Receipt Number 1 1 Date 5 5 Cash Received 4 4 Sales Invoice Amount 2 2 Customer’s Name

12. © 2014 Cengage Learning. All Rights Reserved. Calculating Cash Receipts on Account with Sales Discount ●If a sales discount is offered and the customer takes the discount and pays within the discount terms, the merchandising business needs to account for the discount. ●Multiply the invoice amount by the discount amount to determine the amount of the discount. SLIDE 12 LO5 Lesson 10-3 Sales Invoice Amount Sales Discount Rate Sales Discount × = $1,450.002%$29.00× =

13. © 2014 Cengage Learning. All Rights Reserved. Journalizing Cash Receipts on Account with Sales Discounts SLIDE 13 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, $29.00. Receipt No. 611. 3 3 Receipt Number 1 1 Date 5 5 Sales Discount 2 2 Customer’s Name Cash 1,421.80 Accounts Receivable 1,450.00 Sales Discount 29.00 6 6 Cash Received 4 4 Original Sales Amount

14. © 2014 Cengage Learning. All Rights Reserved. Work Together 10-3: Journalize transactions in the Cash Receipts Journal Sept. 3. Received cash on account from Lenny Stafford covering S216, $2,189.36, less 2% discount. R264. *discount: 2189.36 x.02 = 43.79 SLIDE 14 Lesson 10-3

15. © 2014 Cengage Learning. All Rights Reserved. Work Together 10-3: Journalize transactions in the Cash Receipts Journal Sept. 6. Recorded cash and credit card sales, $5,326.30, plus sales tax, $298.15; total, $5,624.45. TS38. SLIDE 15 Lesson 10-3

16. © 2014 Cengage Learning. All Rights Reserved. Work Together 10-3: Journalize transactions in the Cash Receipts Journal Sept. 8. Received cash on account from Venice Café covering S218 for $390.34, less 2% discount. R265. *discount: 390.34 x.02 = 7.81 SLIDE 16 Lesson 10-3

17. © 2014 Cengage Learning. All Rights Reserved. Work Together 10-3: Journalize transactions in the Cash Receipts Journal Sept. 20. Recorded cash and credit card sales, $5,624.45, plus sales tax, $320.59; total, $5,945.04. TS39. SLIDE 17 Lesson 10-3

18. © 2014 Cengage Learning. All Rights Reserved. Work Together 10-3: Journalize transactions in the Cash Receipts Journal Sept. 28. Received cash on account from Washington City Schools covering S199 for $1,509.45. R266. SLIDE 18 Lesson 10-3

19. © 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 19 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

20. © 2014 Cengage Learning. All Rights Reserved. Lesson 10-3 Audit Your Understanding 2.What are the two types of batch reports? SLIDE 20 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

21. © 2014 Cengage Learning. All Rights Reserved. Lesson 10-3 Audit Your Understanding 3.What is meant by 2/10, n/30 credit terms? SLIDE 21 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