Appendix C Special Journals and Subsidiary Ledgers

Subsidiary Ledger Contains a large number of individual accounts with a common characteristic Provides detail for a Controlling Account in the General Ledger (the primary ledger)

Controlling Account Summarizing account in the General Ledger Examples: –Accounts Receivable (Customers ledger) Made up of individual account balances due from customer –Accounts Payable (Creditors ledger) Made up of individual account balances owed to vendors

Accounts Receivable Ledger Maintains separate account for each customer Keeps track of: –credit extended to customer –payments received from customer –Balance due from customer Total of all customer accounts in Accounts Receivable Ledger should equal balance of Accounts Receivable in the General Ledger

Accounts Payable Ledger Maintains separate account for each vendor Keeps track of: –credit extended by vendor –payments made to vendor –Balance owed to vendor Total of all vendor accounts in Accounts Payable Ledger should equal balance of Accounts Payable in the General Ledger

Special Journal Used when a business has a large number of similar transactions

Common types of Special Journals 1)Cash Payments Journal 2)Cash Receipts Journal 3)Revenue Journal 4)Purchases Journal

Cash Payments Journal Used to record all cash payments Transactions will have a credit to Cash Examples of transactions: –Paying expenses –Paying amounts owed to vendors

Cash Receipts Journal Used to record all cash receipts Transactions will have a debit to Cash Examples of transactions –Providing services for cash –Receiving cash from customers on account

Revenue Journal Used to record services provided on account Transactions will have a debit to Accounts Receivable and a Credit to Revenue

Purchases Journal Used to record purchases on account Transactions will have a credit to Accounts payable Examples of transactions –Purchase of supplies on credit –Purchase of equipment on credit

General Journal Used to record entries that don’t fit into special journals Examples of transactions –Adjusting entries –Closing entries –Special transactions

Revenue Journal. Invoice Post Accts. Rec. Dr. Date No. Account Debited Ref Fees Earned Cr. Customer name enter check mark when posted to A/R Ledger post total of column as a Dr. to A/R and a Cr. to Fees Earned

Revenue Journal Example Nov. 1Issued Invoice #1 to Sandoval Company for services performed, $750.

Revenue Journal Page 13 Invoice Post Accts. Rec. Dr. Date No. Account Debited Ref Fees Earned Cr. Nov. 1 1 Sandoval Co. 750

Accounts Receivable Subsidiary Ledger. Customer Name: Sandoval Company Post Date Item Ref Dr. Cr. Balance Nov

Cash Receipts Journal. Other Accounts Post Accounts Receivable Cash Date Account Credited Ref Cr. Cr. Dr. For receipt of payments from customers: Customer name enter amount amount check mark when posted to A/R Ledger Post: 1) Transaction amount to Accounts Receivable Ledger 2) Total of Accounts Receivable column as a Cr. To Accounts Receivable in the General Ledger 3) Total of Cash column as a Dr. to Cash in the General Ledger

Cash Receipts Journal. Other Accounts Post Accounts Receivable Cash Date Account Credited Ref Cr. Cr. Dr. For receipt of cash from revenue: Revenue revenue amount amount acct # Post: 1) Transaction amount to revenue account in the General Ledger 2) Total of Accounts Receivable column as a Cr. To Accounts Receivable in the General Ledger 3) Total of Cash column as a Dr. to Cash in the General Ledger

Cash Receipts Journal Example Nov. 9 Received $500 from Sandoval Co. on account

Cash Receipts Journal Page 27. Other Accounts Post Accounts Receivable Cash Date Account Credited Ref Cr. Cr. Dr. Nov. 8 Sandoval Co

Accounts Receivable Subsidiary Ledger. Customer Name: Sandoval Company Post Date Item Ref Dr. Cr. Balance Nov

Purchases Journal. Accounts Other Post Payable Supplies Accounts Post Date Account Credited Ref Cr. Dr. Dr. Ref. Amount Vendor name enter * ** check mark when posted to A/P Ledger * Every transaction will have an amount in the Accounts Payable column. Individual transaction amounts will be posted to the Accounts Payable Ledger.The total of this column will be posted as a credit to Accounts payable in the General Ledger ** An amount is entered in this column if the purchase is for supplies, and the total of this column is posted to the Supplies account in the General Ledger.

Purchases Journal. Accounts Other Post Payable Supplies Accounts Post Date Account Credited Ref Cr. Dr. Dr. Ref. Amount Vendor name enter * ** *** check mark when posted to A/P Ledger *If the purchase is for something other than Supplies, write in the name of the account (ex.: Equipment) ** Enter the account # of the account to show that the amount is posted here. *** Post the amount to the General Ledger account

Accounts Payable Subsidiary Ledger. Vendor Name: Post Date Item Ref Dr. Cr. Balance

Purchases journal transaction Nov. 5 Purchased supplies on account from Walsh, Inc., $85

Purchases Journal Page 55 Accounts Other Post Payable Supplies Accounts Post Date Account Credited Ref Cr. Dr. Dr. Ref. Amount Nov. 5 Walsh, Inc 85 85

Accounts Payable Subsidiary Ledger. Vendor Name: Walsh, Inc. Post Date Item Ref Dr. Cr. Balance Nov

Cash Payments Journal. Other Accounts Post Accounts Payable Cash Date Account Debited Ref Dr. Dr. Cr.. For payments made to vendors: Vendor name enter amount amount check mark when posted to A/R Ledger Post: 1) Transaction amount to Accounts Payable Ledger 2) Total of Accounts Payable column as a Dr. to Accounts Payable in the General Ledger 3) Total of Cash column as a Cr. to Cash in the General Ledger

Cash Payments Journal. Other Accounts Post Accounts Payable Cash Date Account Debited Ref Dr. Dr. Cr.. For payment of cash for rent expense, utilities expense, etc.: Name of account acct # amount amount Post: 1) Transaction amount to account in the General Ledger 2) Total of Cash column as a Cr. to Cash in the General Ledger

Cash Payments example Nov. 15 Paid $85 to Walsh, Inc. on account

Cash Payments Journal Page 6. Other Accounts Post Accounts Payable Cash Date Account Debited Ref Dr. Dr. Cr. Nov 15 Walsh, Inc

Accounts Payable Subsidiary Ledger. Vendor Name: Walsh, Inc. Post Date Item Ref Dr. Cr. Balance Nov