Journalizing Sales and Cash Receipts Chapter 11 Journalizing Sales and Cash Receipts

Sales Tax Laws of most states require a tax be collected each time a sale is made. The sales tax in Texas is _______ ? Business must file reports with the government and pay the amount of sales tax collected.

Sales Tax Continued The amount of sales tax collected is considered a liability to the business. Sales Tax Formula Price of Goods X Sales Tax Rate = Sales Tax

Vocabulary Customer – a person or business to whom merchandise or services are sold. Sale tax – a tax on a sale of merchandise or services. Cash sale – a sale in which cash is received for the total amount of the sale at the time of the transaction. Credit card sale – a sale in which a credit card is used for the total amount of the sale at the time of the transaction.

CONCEPT: Realization of Revenue Regardless of when payment is made, revenue is recorded at the time of sale, not on the date cash is received.

CASH AND CREDIT CARD SALES November 4. Recorded cash and credit card sales, $5,460.00, plus sales tax, $327.60; total, $5,787.60. Cash Register Tape No 4. Accounts Affected Cash Sales Sales Tax Payable Classification Asset Revenue Liability Change Increased Entered Debit side Credit side Cash Sales normal balance normal balance  5,787.60 5,460.60  Sales Tax Payable normal balance 327.60  Lesson 11-1, page 255

CASH AND CREDIT CARD SALES 1 2 3 4 5 6 7 1. Write the date. 2. Place a check mark in the Account Title column to show that no account title needs to be written. 3. Write the cash register tape number. 4. Place a check mark in the Post. Ref. column to show that amounts on this line are not to be posted individually. 5. Write the sales amount. 6. Write the sales tax amount. 7. Write the cash amount. Lesson 11-1, page 255

SALES INVOICE Lesson 11-1, page 256

SALES ON ACCOUNT Accounts Affected Accounts Receivable Sales November 3. Sold merchandise on account to Children’s Paradise, $816.00, plus sales tax, $48.96; total, $864.96. Sales Invoice No. 76. Accounts Affected Accounts Receivable Sales Sales Tax Payable Classification Asset Revenue Liability Change Increased Entered Debit side Credit side Accounts Receivable Sales normal balance normal balance  864.96 816.00  Sales Tax Payable normal balance 48.96  Lesson 11-1, page 257

SALES ON ACCOUNT 2 1 3 4 6 5 1. Write the date. 4. Write the total amount owed. 2. Write the customer name. 5. Write the sales amount. 3. Write the sales invoice number. 6. Write the sales tax amount. Lesson 11-1, page 257

CASH RECEIPTS ON ACCOUNT 1 2 3 4 5 1. Write the date. 2. Write the customer’s name. 3. Write the receipt number. 4. Write the credit amount. 5. Write the debit amount. Lesson 11-1, page 258

Complete 11-1 Work Together and on your own

CARRYING TOTALS FORWARD ON THE LEFT PAGE 1 6 2 3 4 5 1. Rule a single line. 2. Write the date. RIGHT PAGE 3. Write Carried Forward. 4. Place a check mark. Lesson 11-2, p. 260-261 5. Write each column total. 6. Rule double lines.

STARTING A NEW EXPANDED JOURNAL LEFT PAGE 1  2 3 5 4 1. Write journal page number on the left and right pages. 2. Write the date. 3. Write Brought Forward. RIGHT PAGE 4. Place a check mark. 5. Record column total brought forward. Lesson 11-2, p. 262-263

PROVING AND RULING OF AN EXPANDED JOURNAL AT THE END OF THE MONTH 1 5 2 3 4 1. Rule a single line. 2. Write the date. 3. Write Totals. 4. Write each column total. RIGHT PAGE 5. Rule double lines. Lesson 11-2, p. 264-265

Complete the 11-2 Work Together and on your own