Journalizing Sales and Cash Receipts Using Special Journals Chapter 10, Section 2

Processing Sales Transactions Cash Sale – cash is received at time of transaction Credit Card Sale – credit card is used for the total amount of the sale at the time of the transaction Point-of-Sale (POS) Terminal – computer used to collect, store, and report all the information of a sales transaction Terminal Summary – report that summarizes the cash and credit card sales of a POS terminal

Processing Sales Transactions UPC (Universal Product Code) Cash Register Receipt Point-of-Sale (POS) Terminal Receipt (continued on next slide)

Processing Sales Transactions Terminal Summary Batch Report (continued from previous slide)

Processing Credit Cards Batch Report – report of credit card sales produced by a POS terminal Batching Out – process of preparing a batch report of credit card sales from a POS terminal Bank handles the further processing of credit cards through EFT. Business pay a percentage of credit card sales as a fee for credit card processing.

Cash Receipts Journal All cash receipts are recorded in this journal Cash and credit card sales are treated the same and recorded in one transaction

Recording 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. Terminal Summary 34. 2 4 1 3 5 6 7 1. Write the date. 2. Place a check mark in the Account Title column. 3. Write the terminal summary document number. 4. Place a check mark in the Post. Ref. column. 5. Write the sales amount. 6. Write the sales tax amount. 7. Write the cash amount.

Sales Discount What is a cash discount? Discount to encourage prompt payment Terms: 2/10, n/30 Sales Discount – a cash discount on sales taken by a customer Contra account to Sales Sales Discount Debit Normal Balance  

Journalizing Cash Receipts on Account November 6. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90. 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.

Journalizing Cash Receipts on Account with Sales Discount November 7. Received cash on account from Cumberland Center, $1,176.00, covering Sales Invoice No. 74 for $1,200.00, less 2% discount, $24.00. Receipt No. 91. 1 2 3 4 5 6 1. Write the date. 4. Write the original invoice amount. 2. Write the customer’s name. 5. Write the amount of sales discount. 3. Write the receipt number. 6. Write the debit to cash.

Totaling, Proving, and Ruling At the end of each month, cash receipts journal must be totaled, proved and ruled.

Proving Cash Cash is proved at the end of each month to be sure the checkbook and Cash account agree. Cash on hand at the beginning of the month $17,647.44 (Beginning balance in Cash account) Plus total cash received during the month 38,668.80 (Cash Debit column total, cash receipts journal) Equals total $56,316.24 Less total cash paid during the month 32,901.40 (Cash Credit column total, cash payments journal) Equals cash balance on hand at end of month $23,414.84 Checkbook balance on the next unused check stub $23,414.84

Problems Work Together 10-2 (Text pg. 284) On Your Own 10-2 (Text pg. 284) Application 10-2 (Text pg. 289) Study Guide 10