CHAPTER THIRTEEN SPECIAL JOURNALS

SPECIAL JOURNALS Designed for recording only certain kinds of transactions Save time journalizing and posting transactions: Transactions entered on a single line Column totals are posted periodically General Journal still needed for some transactions

Only sales “on account,” SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Only sales “on account,” not cash sales.

Any transaction in which Cash Sales are recorded in this journal. SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Cash receipts Any transaction in which cash is received. Cash Sales are recorded in this journal.

“ON ACCOUNT” purchases SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Cash receipts Purchases Journal Purchases on account “ON ACCOUNT” purchases of MERCHANDISE only

Any transaction in which cash is paid. SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Cash receipts Purchases Journal Purchases on account Cash Payments Journal Cash payments Any transaction in which cash is paid.

SALES TRANSACTIONS Let’s review the General Journal entries for these transactions. April 4 Made sale no. 133C on account to Enrico Lorenzo, $1,520 plus $76 sales tax April 10 Made sale no. 134C on account to Brenda Myers, $40 plus $22 sales tax April 18 Made sale no. 105D on account to Edith Walton, $980 plus $49 sales tax April 21 Made sale no. 202B on account to Susan Chang, $620 plus $31 sales tax April 24 Made sale no. 162A on account to Heidi Schwitzer, $1,600 plus $80 sales tax

4 lines are used to prepare GENERAL JOURNAL DATE DESCRIPTION DEBIT PR CREDIT 1 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 2 Sales 1,520 00 3 Sales Tax Payable 76 00 4 sale no. 133C 5 4 lines are used to prepare one journal entry!! 6 7 8 9 10 11

GENERAL JOURNAL DATE DESCRIPTION DEBIT PR CREDIT 1 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 2 Sales 1,520 00 3 Sales Tax Payable 76 00 4 sale no. 133C 5 6 10 Accts. Receivable/B. Myers 462 00 7 Sales 440 00 8 Sales Tax Payable 22 00 9 sale no. 134C 10 11

GENERAL JOURNAL continued DATE DESCRIPTION DEBIT PR CREDIT 12 18 Accts. Receivable/E. Walton 1,029 00 13 Sales 980 00 14 Sales Tax Payable 49 00 15 sale no. 105D 16 17 21 Accts. Receivable/S. Chang 651 00 18 Sales 620 00 19 Sales Tax Payable 31 00 20 sale no. 202B 21 22

GENERAL JOURNAL continued DATE DESCRIPTION DEBIT PR CREDIT 23 24 Accts. Receivable/H. Schwitzer 1,680 00 24 All the entries involved the same accounts!! Sales 1,600 00 25 Sales Tax Payable 80 00 26 sale no. 162A 27 28 29 30 31 32 33

SALES JOURNAL A column for each account involved in “Sales on account” transactions: Accounts Receivable (Debit), Sales (Credit), Sales Tax Payable (Credit) Four steps for entering a transaction: Step #1 Enter Date Step #2 Enter Sales number Step #3 Enter Customer Step #4 Enter Dollar amount

The whole transaction is Account names are not entered. SALES JOURNAL Page 6 Date Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 3 The whole transaction is recorded on ONE line. Account names are not entered. 4 5 6 7 8 9 10 11

Now let’s look at posting SALES JOURNAL Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 7 Now let’s look at posting from the Sales Journal. 8 9 10 11

Step #1a Total the amount columns. SALES JOURNAL Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 Step #1a Total the amount columns. 8 9 10 11

SALES JOURNAL Step #1b Verify that the total Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 Step #1b Verify that the total of the debit column equals the total of the credit columns. 8 9 10 11

SALES JOURNAL Debits $5,418 Credits $5,418 Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 8 Debits $5,418 Credits $5,418 9 10 11

Step #1c Rule the columns. SALES JOURNAL Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 8 Step #1c Rule the columns. 9 10 11

Let’s post the Accounts Receivable total. SALES JOURNAL Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 8 Let’s post the Accounts Receivable total. 9 10 11

FOUR-COLUMN ACCOUNT 122 ACCOUNTS RECEIVABLE Step #2 Enter the date. Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 12,000 30 Step #2 Enter the date.

FOUR-COLUMN ACCOUNT 122 ACCOUNTS RECEIVABLE Step #3 Enter the amount. Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 12,000 30 5,418 Step #3 Enter the amount.

Step #4 Enter the new balance. FOUR-COLUMN ACCOUNT 122 ACCOUNTS RECEIVABLE Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 12,000 30 5,418 17,418 Step #4 Enter the new balance.

Step #5 Enter “S” for Sales Journal and the journal page number. FOUR-COLUMN ACCOUNT 122 ACCOUNTS RECEIVABLE Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 12,000 30 S6 5,418 17,418 Step #5 Enter “S” for Sales Journal and the journal page number.

Step #6 Enter the account number below the column total. SALES JOURNAL Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 (122) 8 Step #6 Enter the account number below the column total. 9 10 11

SALES JOURNAL Steps #2 - #6 will be repeated for the Page 6 Date Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 (122) (401) (231) 8 Steps #2 - #6 will be repeated for the Sales and Sales Tax Payable columns. 9 10 11

SALES JOURNAL A company that does not charge Page 1 Date Sale No. To Whom Sold PR Accts. Receivable Debit/Sales Credit 1 2 3 4 A company that does not charge sales tax, such as a wholesaler, will use a single column Sales Journal. 5 6 7 8 9 10 11

SALES JOURNAL Each transaction must also be posted Page 6 Date Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit 20-- 1 Apr 4 133C Enrico Lorenzo 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 (122) (401) (231) 8 Each transaction must also be posted to the Accounts Receivable ledger. 9 10 11

ACCOUNTS RECEIVABLE LEDGER Name: Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 BALANCE DATE ITEM PR DEBIT CREDIT 20-- Apr. 4 S6 1,596 1,596 Step #1 Enter the date. Step #2 Enter the amount. Step #3 Update the balance. Step #4 Enter “S” (Sales Journal) and “6” (page number) in the PR column.

SALES JOURNAL “ /” is entered to indicate the Page 6 Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit Date 20-- 1 Apr 4 133C Enrico Lorenzo ( / ) 1,596 1,520 76 2 10 134C Brenda Myers 462 440 22 3 18 105D Edith Walton 1,029 980 49 4 21 202B Susan Chang 651 620 31 5 24 162A Heidi Schwitzer 1,680 1,600 80 6 5,418 5,160 258 7 (122) (401) (231) 8 “ /” is entered to indicate the transaction has been posted to the Accounts Receivable ledger. 9 10 11

The other sales are posted to the Accounts Receivable ledger SALES JOURNAL Page 6 Date Sale No. To Whom Sold PR Accts. Rec. Debit Sales Credit Sales Tax Pay. Credit 20-- 1 Apr 4 133C Enrico Lorenzo ( / ) 1,596 1,520 76 2 10 134C Brenda Myers ( / ) 462 440 22 3 18 105D Edith Walton ( / ) 1,029 980 49 4 21 202B Susan Chang ( / ) 651 620 31 5 24 162A Heidi Schwitzer ( / ) 1,680 1,600 80 6 5,418 5,160 258 7 (122) (401) (231) 8 The other sales are posted to the Accounts Receivable ledger in the same manner. 9 10 11

CASH RECEIPTS JOURNAL Used to record only cash receipt transactions Includes separate columns for: Cash (Debit) Bank Credit Card Expense (Debit) Accounts Receivable (Credit) Sales (Credit) Sales Tax Payable (Credit) General (Credit)

EXAMPLE: April 14, received cash on account from Enrico Lorenzo CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 1 2 3 EXAMPLE: April 14, received cash on account from Enrico Lorenzo for sale no. 133C, $1,596. 4 5 6 7 8 9 10 11

CASH RECEIPTS JOURNAL Step #1 Enter date. Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 2 3 4 Step #1 Enter date. 5 6 7 8 9 10 11

Step #2 Enter name of account credited. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 2 3 4 Step #2 Enter name of account credited. 5 6 7 8 9 10 11

CASH RECEIPTS JOURNAL This column is used for two purposes: Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 2 3 This column is used for two purposes: 1. To identify the customer name for any collection on account. This column is used whenever the Accounts Receivable Credit column is used. 2. To enter the appropriate account name whenever the General Credit column is used. 4 5 6 7 8 9 10 11

Step #3 Enter the dollar amount. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 3 4 Step #3 Enter the dollar amount. 5 6 7 8 9 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 3 4 5 6 7 8 9 10 11

Cash was also received on account on April 20th and 28th. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 4 5 Cash was also received on account on April 20th and 28th. 6 7 8 9 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 4 5 6 7 8 9 10 11

CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 5 6 7 8 9 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 5 6 7 8 9 10 11

Now let’s journalize cash sales for April 30th CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 5 Now let’s journalize cash sales for April 30th of $3,600 plus tax of $180. 6 7 8 9 10 11

This column is left blank for cash sales. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 This column is left blank for cash sales. 6 7 8 9 10 11

CASH RECEIPTS JOURNAL + = 3,600 180 3,780 Total Credits = Total Debits Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 6 + 3,600 180 = 3,780 7 8 Total Credits = Total Debits 9 10 11

CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 7 Bank credit card sales are similar to cash sales, no entry is made in the “Account Credited” column. 8 9 10 11

Bank Credit Card Sales of $2,500 CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 6 7 Bank Credit Card Sales of $2,500 were made this month. 8 9 10 11

Sales Tax on these sales was $125. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 6 7 Sales Tax on these sales was $125. 8 9 10 11

The service charge on these bank credit card sales was $100. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 6 7 The service charge on these bank credit card sales was $100. 8 9 10 11

[($2,500sales + $125tax) - $100service chg]. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,525 6 7 The cash received was $2,525 [($2,500sales + $125tax) - $100service chg]. 8 9 10 11

CASH RECEIPTS JOURNAL Example: April 30, received cash Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 Example: April 30, received cash for rent revenue $600. 7 8 9 10 11

We need to credit Rent Revenue and debit Cash. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 7 8 We need to credit Rent Revenue and debit Cash. 9 10 11

CASH RECEIPTS JOURNAL Since there is no column for Rent Revenue, Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 600 7 8 Since there is no column for Rent Revenue, we must use the “General Credit” column. 9 10 11

CASH RECEIPTS JOURNAL When the “General Credit” column is used, Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 600 7 When the “General Credit” column is used, the “Account Credited” column must identify the specific General Ledger account affected. 8 9 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 8 9 10 11

Borrowing money would be recorded in a similar manner. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3,000 8 Borrowing money would be recorded in a similar manner. 9 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 9 10 11

CASH RECEIPTS JOURNAL On a daily basis, the amounts in the Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3,000 8 On a daily basis, the amounts in the “General Credit” column are posted. 9 10 11

“CR” for Cash Receipts Journal. FOUR-COLUMN ACCOUNT 412 RENT REVENUE Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 1,800 30 CR7 600 2,400 “CR” for Cash Receipts Journal.

General Ledger account number CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 3,000 8 General Ledger account number 9 10 11

Notes Payable is posted in the same manner. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 Notes Payable is posted in the same manner. 9 10 11

At the end of the month, the columns are totaled. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 3,600 3,087 9 At the end of the month, the columns are totaled. 10 11

CASH RECEIPTS JOURNAL Next, we verify that the debit columns Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 Next, we verify that the debit columns equal the total of the credit columns. 10 11

CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 $3,600 + $3,087 + $6,100 + $305 = $13,092 Credits 10 11

CASH RECEIPTS JOURNAL $100 + $12,992 = $13,092 Debits Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 $100 + $12,992 = $13,092 Debits DEBITS = CREDITS!!! 10 11

Each column total (except General) is posted at the end of the month. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 Each column total (except General) is posted at the end of the month. 10 11

“CR” for Cash Receipts Journal FOUR-COLUMN ACCOUNT 122 ACCOUNTS RECEIVABLE Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance 12,000 30 S6 5,418 17,418 30 CR7 3,087 14,331 “CR” for Cash Receipts Journal

Account Number indicates CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 (122) Account Number indicates total was posted. 10 11

Remaining columns are posted in the same manner. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 (122) (401) (231) (513) (101) 10 Remaining columns are posted in the same manner. 11

“ ” indicates the column total is not posted. CASH RECEIPTS JOURNAL Page 7 General Credit Accts. Rec. Credit Sales Credit Sales Tax Pay. Credit Bank C C Exp. Debit Cash Debit 1 1,596 1,596 2 462 462 3 1,029 1,029 4 3,600 180 3,780 5 2,500 125 100 2,500 6 600 600 7 3,000 3,000 8 3,600 3,087 6,100 305 100 12,992 9 ( / ) (122) (401) (231) (513) (101) 10 “ ” indicates the column total is not posted. ( / ) 11

Postings to the subsidiary Accounts Receivable ledger are made daily. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 3,600 3,087 9 Postings to the subsidiary Accounts Receivable ledger are made daily. 10 11

ACCOUNTS RECEIVABLE LEDGER Name: Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 BALANCE DATE ITEM PR DEBIT CREDIT 20-- Apr. 4 S6 1,596 1,596 14 CR7 1,596

CASH RECEIPTS JOURNAL “ ” indicates transaction was posted to Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo ( / ) 1,596 2 20 Brenda Myers 462 3 28 Edith Walton 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 3,600 3,087 9 “ ” indicates transaction was posted to the Accounts Receivable subsidiary ledger. ( / ) 10 11

The payments by Brenda and Edith are posted in the same manner. CASH RECEIPTS JOURNAL Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo ( / ) 1,596 2 20 Brenda Myers ( / ) 462 3 28 Edith Walton ( / ) 1,029 4 30 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 3,600 3,087 9 The payments by Brenda and Edith are posted in the same manner. 10 11

CASH RECEIPTS JOURNAL “ ” is entered into the PR column Page 7 Date Account Credited PR General Credit Accts. Rec. Credit 20-- 1 Apr 14 Enrico Lorenzo ( / ) 1,596 2 20 Brenda Myers ( / ) 462 3 28 Edith Walton ( / ) 1,029 4 30 ( / ) 5 30 ( / ) 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3,000 8 3,600 3,087 9 “ ” is entered into the PR column for cash sales and bank credit card sales. ( / ) 10 11

PURCHASES JOURNAL Purchases of MERCHANDISE for resale Only ON ACCOUNT Cash purchases would be recorded in the Cash Payments Journal. Single column format Purchases Debit/Accounts Payable Credit, OR Three column Purchases Debit, Freight-In Debit, Accounts Payable Credit

For our example, we will use a single column Purchases Journal. Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 1 2 3 4 For our example, we will use a single column Purchases Journal. 5 6 7 8 9 10 11

PURCHASES JOURNAL Example: On April 4th, purchased Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. 3,300 2 3 4 Example: On April 4th, purchased merchandise from Compucraft, Inc. $3,300 Invoice no. 631, dated April 2, n/30. 5 6 7 8 9 10 11

All purchases transactions PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. 3,300 2 8 927D Datasoft 2,500 3 11 804 EZX Corp. 8,700 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5,300 6 7 All purchases transactions are journalized in the same manner. 8 9 10 11

General Ledger accounts. PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. 3,300 2 8 927D Datasoft 2,500 3 11 804 EZX Corp. 8,700 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5,300 6 20,600 7 At the end of the month, the column is totaled, ruled, and posted to the General Ledger accounts. 8 9 10 11

“P” for Purchases Journal FOUR-COLUMN ACCOUNT 501 PURCHASES Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance ( / ) 17,400 30 P8 20,600 38,000 “P” for Purchases Journal

Account Number indicates column total has been posted. PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. 3,300 2 8 927D Datasoft 2,500 3 11 804 EZX Corp. 8,700 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5,300 6 20,600 7 (501) 8 Account Number indicates column total has been posted. 9 10 11

FOUR-COLUMN ACCOUNT 202 ACCOUNTS PAYABLE Account: Account No. BALANCE DATE ITEM PR DR. CR. DR. CR. 20-- Apr. 1 Balance ( / ) 4,800 30 P8 20,600 25,400

Transactions are posted to the Accounts Payable ledger PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. 3,300 2 8 927D Datasoft 2,500 3 11 804 EZX Corp. 8,700 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5,300 6 20,600 7 (501) (202) Transactions are posted to the Accounts Payable ledger on a daily basis. 8 9 10 11

ACCOUNTS PAYABLE LEDGER Name: Compucraft, Inc. Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 BALANCE DATE ITEM PR DEBIT CREDIT 20-- Apr. 4 P8 3,300 3,300

“ ” is placed in the PR column when posting is completed. PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. ( / ) 3,300 2 8 927D Datasoft 2,500 3 11 804 EZX Corp. 8,700 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5,300 6 20,600 7 (501) (202) “ ” is placed in the PR column when posting is completed. 8 ( / ) 9 10 11

The remaining transactions are posted in the same manner. PURCHASES JOURNAL Page 8 Date Invoice No. From Whom Purchased PR Purchases Debit/ Accounts Payable Credit 20-- 1 Apr 4 631 Compucraft, Inc. ( / ) 3,300 2 8 927D Datasoft ( / ) 2,500 3 11 804 EZX Corp. ( / ) 8,700 4 17 611 Printpro Corp. ( / ) 800 5 23 1465 Televax, Inc. ( / ) 5,300 6 20,600 7 (501) (202) The remaining transactions are posted in the same manner. 8 9 10 11

CASH PAYMENTS JOURNAL Used to record only cash payments transactions Every transaction in the journal will involve a credit to the Cash account. Columns are set up in the journal for the most commonly affected accounts in cash payments transactions.

Example: Payment of rent, $2,400 on April 2 CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 1 2 3 4 Example: Payment of rent, $2,400 on April 2 5 6 7 8 9 10 11

CASH PAYMENTS JOURNAL All cash payments (except those Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 2 3 4 All cash payments (except those from Petty Cash) should be made by check for good internal control. 5 6 7 8 9 10 11

CASH PAYMENTS JOURNAL This column is used for two purposes: Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 3 4 This column is used for two purposes: 1. To identify a supplier name for any payment on account 2. To enter the appropriate account name whenever the “General Debit” column is used 5 6 7 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 3 4 5 6 7 8 9 10 11

Example: On April 4 $1,400 of merchandise CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 4 Example: On April 4 $1,400 of merchandise was purchased for cash. 5 6 7 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4 5 6 7 8 9 10 11

Example: On April 10 payment was CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 10 309 B.B. Small 4 5 Example: On April 10 payment was made on account, $4,800. 6 7 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 5 6 7 8 9 10 11

Example: On April 14 payment was CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 2,000 5 Example: On April 14 payment was made on a note payable, $2,000. 6 7 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 6 7 8 9 10 11

Example: On April 22 owner withdrew CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 2,000 5 22 311 Gary L. Fishel, Drawing 1,600 6 Example: On April 22 owner withdrew cash for personal use, $1,600. 7 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 1,600 1,600 6 7 8 9 10 11

CASH PAYMENTS JOURNAL Example: On April 24 made payment Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 2,000 5 22 311 Gary L. Fishel, Drawing 1,600 6 24 312 EZX Corp. 7 Example: On April 24 made payment on account within the discount period. 8 9 10 11

CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 1,600 1,600 6 8,700 87 8,613 7 8 9 10 11

CASH PAYMENTS JOURNAL On a daily basis, the amounts in the Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 2,000 5 22 311 Gary L. Fishel, Drawing 1,600 6 24 312 EZX Corp. 7 On a daily basis, the amounts in the “General Debit” column are posted. 8 9 10 11

CASH PAYMENTS JOURNAL “CP” for Cash Payments journal is entered Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 521 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 201 2,000 5 22 311 Gary L. Fishel, Drawing 312 1,600 6 24 312 EZX Corp. 7 “CP” for Cash Payments journal is entered in the ledger account’s PR column, and the account number is entered in the journal’s PR column. 8 9 10 11

CASH PAYMENTS JOURNAL At the end of the month, the columns are Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 521 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 201 2,000 5 22 311 Gary L. Fishel, Drawing 312 1,600 6 24 312 EZX Corp. 7 6,000 At the end of the month, the columns are totaled, equality of debits and credits is verified, and totals are posted to the General Ledger. 8 9 10 11

CASH PAYMENTS JOURNAL 20,900 20,900 6,000 + 13,500 + 87 + 1,400 20,813 Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 1,600 1,600 6 8,700 87 8,613 7 6,000 13,500 1,400 87 20,813 8 6,000 + 13,500 + 87 + 9 1,400 20,813 10 = 20,900 = 20,900 11

“ ” indicates the column CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 1,600 1,600 6 8,700 87 8,613 7 6,000 13,500 1,400 87 20,813 8 ( / ) 9 “ ” indicates the column should not be posted. ( / ) 10 11

Account numbers indicate CASH PAYMENTS JOURNAL Page 12 General Debit Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Cash Credit 1 2,400 2,400 2 1,400 1,400 3 4,800 4,800 4 2,000 2,000 5 1,600 1,600 6 8,700 87 8,613 7 6,000 13,500 1,400 87 20,813 8 ( / ) (202) (501) (501.2) (101) 9 Account numbers indicate the totals were posted. 10 11

Transactions affecting the Accounts Payable ledger are posted daily. CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 521 2,400 2 4 308 3 10 309 B.B. Small 4 14 310 Notes Payable 201 2,000 5 22 311 Gary L. Fishel, Drawing 312 1,600 6 24 312 EZX Corp. 7 6,000 8 Transactions affecting the Accounts Payable ledger are posted daily. 9 10 11

“ ” is entered to indicate the transaction has been posted. CASH PAYMENTS JOURNAL Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 521 2,400 2 4 308 3 10 309 B.B. Small ( / ) 4 14 310 Notes Payable 201 2,000 5 22 311 Gary L. Fishel, Drawing 312 1,600 6 24 312 EZX Corp. ( / ) 7 6,000 8 “ ” is entered to indicate the transaction has been posted. 9 10 11

CASH PAYMENTS JOURNAL “ ” is also entered for transactions Page 12 Date Check No. Account Debited PR General Debit 20-- 1 Apr. 2 307 Rent Expense 521 2,400 2 4 308 ( / ) 3 10 309 B.B. Small ( / ) 4 14 310 Notes Payable 201 2,000 5 22 311 Gary L. Fishel, Drawing 312 1,600 6 24 312 EZX Corp. ( / ) 7 6,000 8 “ ” is also entered for transactions that do not require individual postings. 9 ( / ) 10 11