9- 1 special journals: sales and cash receipts chapter 9
TRANSCRIPT
9- 1
Special Journals:Sales and Cash
Receipts
Chapter 9
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Specialized journalsspeed up the process
of recordingsales and cash
receipts in a manualaccounting system.
Specialized journalsspeed up the process
of recordingsales and cash
receipts in a manualaccounting system.
Special Journals
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ClassifyingBusiness Organizations
Service businesses provide services.Service businesses provide services.
Merchandise businesses sell products.Merchandise businesses sell products.
Manufacturing businesses make products.Manufacturing businesses make products.
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Tracking Sales and Cash Collections for Credit Customers
The cash receipts journal reduces the amount of daily posting required. It provides a check and balance system.
The sales journal provides an efficient way to track credit sales.
Using both journals provides a better internal control system for sales and cash receipts.
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Merchandising Company
What does a merchandising company do?– buys merchandise from wholesalers– resells the goods at a higher price called the retail
price– must keep track of merchandise inventories– has to present a longer income statement than a
service company does– usually has credit customers
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Learning Objective 1
Journalizing sales onaccount in a sales
journal.
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Learning Unit 9-1
Gross sales = Amount of units sold ×Sales price per unit
Gross sales = Amount of units sold ×Sales price per unit
Amount is credited to the Revenue account.Amount is credited to the Revenue account.
Normal balance is a credit.Normal balance is a credit.
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Learning Unit 9-1
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 explained?
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Accounts Affected Category RulesAccounts Affected Category Rules
Cash Asset Dr. 1,800Accounts Receivable Asset Dr. 1,200Sales Revenue Cr. 3,000
Cash Asset Dr. 1,800Accounts Receivable Asset Dr. 1,200Sales Revenue Cr. 3,000
Learning Unit 9-1
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Debits Credits Date Cash Accts. Rec. Account TitleJuly 19 1,800 1,200 Sales Gross 3,000
Debits Credits Date Cash Accts. Rec. Account TitleJuly 19 1,800 1,200 Sales Gross 3,000
Gross Sales
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Learning Unit 9-1
Sales returns and allowances =Amount allowed for defective merchandise
Sales returns and allowances =Amount allowed for defective merchandise
Amount is debited in the journal entry.Amount is debited in the journal entry.
Normal balance is a debit.Normal balance is a debit.
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Learning Unit 9-1
Accounts Affected Category RulesAccounts Affected Category Rules
Sales Returns and Contra- Dr. 10 Allowances revenue Accounts Receivable Asset Cr. 10
Sales Returns and Contra- Dr. 10 Allowances revenue Accounts Receivable Asset Cr. 10
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Learning Unit 9-1
What is a sales discount? It is a percent decrease in the amount
collected from credit customer. This deduction is given as an incentive to
the accounts receivable (credit) customer to pay bills early.
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Learning Unit 9-1
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.
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Debits CreditsDate Cash Disc. Accts. Rec. Account TitleJuly 19 39.20 .80 40.00 Michelle
Reese
Debits CreditsDate Cash Disc. Accts. Rec. Account TitleJuly 19 39.20 .80 40.00 Michelle
Reese
Cash Receipts Journal – Page 90
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Learning Unit 9-1
What is sales tax payable? It is a percent multiplied by the gross
amount of the sale collected from customers.
The business has a liability to the taxing authority for the amounts collected.
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Learning Unit 9-1
Usually, the full amount is submitted to the state even if there is also a city sales tax.
States collect the tax, divide it, and remit the amounts to the city or county.
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Learning Objectives 2 and 3
Posting from a sales journalto the general ledger.
Recording to the accounts receivable subsidiary ledger from
asales journal.
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Sales journal records sales of merchandiseon account.
Sales journal records sales of merchandiseon account.
Cash receipts journal records receivingcash from any source.
Cash receipts journal records receivingcash from any source.
Learning Unit 9-2
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Learning Unit 9-2
Credit sales make record keeping more complicated.
A separate record for each customer must be set up.
These records are called a subsidiary ledger.
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Learning Unit 9-2
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.
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Learning Unit 9-2
Sales journal records sale of merchandise on account.
Cash receipts journal records cash received. Purchases journal records buying
merchandise or other items on account. Cash disbursements journal records
payments.
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Learning Unit 9-2
Sales transaction amounts are posted to each credit customer in the subsidiary ledger.
This process allows up-to-date records of credit customer balances.
The amount and age of the account balance is shown.
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Learning Unit 9-2
The sales journal records all sales on account (credit sales only).
Each credit sale transaction is posted to each credit customer as a debit.
The totals of the Accounts Receivable, Sales Tax Payable, and Sales columns are posted to each of these general ledger accounts.
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Learning Objective 4
Preparing, journalizing,
recording, and postinga credit memorandum.
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Learning Unit 9-3
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.
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Sales Ret. and Credit Account PR Allow. – Dr. Date Memo No. Credited
Accts. Rec. – Cr.200xApril 12 1 BW Co. 600.00
Sales Ret. and Credit Account PR Allow. – Dr. Date Memo No. Credited
Accts. Rec. – Cr.200xApril 12 1 BW Co. 600.00
Sales Returns andAllowances Journal
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Learning Objective 5
Journalizing and postingtransactions using a cash receipts journal, as well
as recording to the accountsreceivable subsidiary
ledger.
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Learning Unit 9-4
The cash receipts journal records the receipt of cash from any source.
The number of columns varies with each business, depending upon the frequency of certain types of transactions.
The cash receipt journal speeds up the posting process because a total is debited to cash.
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Learning Unit 9-4
Debit ColumnCash
Sales Discount
Debit ColumnCash
Sales Discount
Credit ColumnAccounts Receivable
SalesSundry
Credit ColumnAccounts Receivable
SalesSundry
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End of Chapter 9