Download - Section 2: Cash Receipts Journal
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ACCOUNTING I IMS. ALLTUCKER
Section 2: Cash Receipts Journal
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Learning Objectives
What you will learn: How to record transactions in the cash receipts journal How to post from the cash receipts journal to accounts
receivable subsidiary ledger accounts How to post amounts in the general credit columns of
cash receipts journal to general ledger accounts How to post column totals How to prepare a schedule of accounts receivable
Why it’s important: Use of cash receipts journal will save time and reduce
errors
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Cash Receipts Journal
Cash receipts Payments made from charge customers Cash sales Bank card sales Sale of other business assets
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Cash Receipts Journal
Special journal used to record all cash receipt transactions
Every transaction recorded in cash receipts journal REQUIRES a debit to cash in bank Cash in bank debit column
Contains six amount columns
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Cash Receipts Journal
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Recording Cash from Charge Customers
Business Transaction
On December 5, OnYour Mark received $212from Casey Klein toapply on account,Receipt 301.
JOURNAL ENTRY
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Recording Cash Received on Account, Less a Cash Discount
Business Transaction
On December 12, On Your Mark received $1,470from South Branch High School Athletics in pay-ment of Sales Slip 51 for $1,500 less the discount of $30, Receipt 302.
JOURNAL ENTRY
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Recording Cash Sales
Business Transaction
On December 15, On YourMark records the cash salesfor the first two weeks ofDecember, $3,000, and $180in related sales taxes,Tape 55.
JOURNAL ENTRY
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Posting to the Accounts Receivable Subsidiary Ledger
Daily postings are made from the Accounts Receivable Credit column to the accounts receivable subsidiary ledger
Ensures that customer accounts are always present
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Posting to the Accounts Receivable Subsidiary Ledger
1. Enter the date of the transaction in the ledger account
2. Enter the post reference CR—cash receipts Example: CR12
3. enter the amount shown in the acct/rec credit column of the cash receipts journal
4. Compute new balance5. Enter a check mark in the post reference
column in cash receipts journal
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Posting to the Accounts Receivable Subsidiary Ledger
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Posting the General Credit Column
1. Enter the date of the transaction 2. Enter the journal letter and page number3. Enter amount from general column 4. compute new balance5. Return to cash receipts journal and enter
the general ledger account number in post reference
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Posting the General Credit Column
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Footing, Totaling, Proving and Ruling the CR Journal
1. Draw a single line across the six columns, below the last transaction
2. foot the columns3. Test for the equality of debits and credits4. Enter date of last transaction 5. Write “Totals”6. Enter the column totals in pen7. Double rule the amount columns** column totals are then posted to the general
ledger
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Posting Column totals to the General Ledger
There are six amount columns in a CR journalONLY 5 COLUMN TOTALS ARE POSTED
Total of the general credit column is NOT posted Entries have already been posted, individually, to the
general ledger accounts
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Posting Column totals to the General Ledger
1. Place a check mark in parenthesis under the General column total—this total is not posted
2. Post the sales total to the sales account credit column3. post the sales tax payable4. Post the accounts receivable total5. post the Sales discount total6. Post the cash in bank total7. Compute new balances for each8. Write the account number of each account below the
double lineLOOK ON PAGE 437 FOR AN EXAMPLE
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Proving the Acct/Rec. Subsidiary Ledger
At the end of the month you have to prove that the Accounts Receivable (controlling account) total EQUALS the total of all subsidiary account
Schedule of Accounts Receivable report listing each charge customer, the balance in the customer’s account, and the total amount due from all customers
May be prepared on plain paper
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Schedule of Accounts Receivable
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Errors in the Subsidiary Ledger
Proving accounts receivable Internal control procedure that often uncovers certain
types of errors Detects a failure to post a transaction Detects a failure in computing new balances DOES NOT provide assurance that transactions were
posted to the correct customer account within the subsidiary ledger These types of errors are often detected when a
customer finds an error in their monthly billing