Sales on Account What journal do we use? TEST YOUR KNOWLEDGE

What journal is used for the following: Purchased merchandise for cash? Purchased merchandise on account? Sold merchandise on account Paid advertising expense? Sold merchandise for cash Purchased Supplies-office on account? Returned Merchandise? Replenish Petty Cash Account? Received Credit Card and Cash Sales? Cash Payment Journal Purchases Journal Sales Journal Cash Payment Journal General Journal Cash Payment Journal Cash Receipts Journal

LESSON 10-2 Journalizing Cash Receipts Using a Cash Receipts Journal Only includes cash receipt transactions Received Cash from Sales for cash/credit Received payment on account

Two Types of Cash Sales: Cash Sale: cash is received at time of transaction Credit Card Sale: sale where credit card used received for transaction Point-of-sale (POS) terminal: computer used to collect, store, and report all the information of a sales transaction: Where can you find a POS? Tells what, when, and how sold Scans the UPC barcode on items

PROCESSING SALES TRANSACTIONS Cash Register Receipt Point-of-Sale (POS) Terminal Receipt Customer Receipt Traditional

PROCESSING SALES TRANSACTIONS Terminal summary (TS): Summarizes the cash and credit card sales of a POS terminal TS = source document for sales for cash/credit card Who has the most sophisticated POS system? Terminal Summary

BATCH REPORT Batch Out: process of preparing a batch report of credit card sales from POS POS sends message of sales to bank Bank sends sales to the Federal Reserve Bank Federal reserve acquires the money from purchaser’s bank Federal reserve deposits money to business Batch Report

CASH AND CREDIT CARD SALES October 1. Recorded cash and credit card sales $5,460.00, plus sales tax, $327.60; total, $5, TS 42. What Accounts are impacted and how? Cash – is increased as a ? Sales Tax Payable – increases as a ? Sales - increases as a ? Cash Sales Sales Tax Payable

CASH AND CREDIT CARD SALES Oct. 1. Recorded cash and credit card sales, $5,460.00, plus sales tax, $327.60; total, $5, Terminal Summary 42. What Accounts are impacted and how? Cash Receipts Journal Page: DateAccount Title Doc No Post. Ref General Accounts Receivable Credit Sales Credit Sales Tax Payable Credit Sales Discount Debit Cash Debit DebitCredit

CASH RECEIPTS ON ACCOUNT October 1. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90. What accounts are impacted and how? Cash – increased as ? Accts Rec/ - decreased as ? Cash Acct Rec/Country Crafters

CASH RECEIPTS ON ACCOUNT Oct 1. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No Cash Receipts Journal Page: DateAccount Title Doc No Post. Ref General Accounts Receivable Credit Sales Credit Sales Tax Payable Credit Sales Discount Debit Cash Debit DebitCredit 1 TS

CASH RECEIPTS WITH A DISCOUNT Sales Discount: cash discount on sales taken by customer for quick payment incentive Contra Account to Sales What side is the Normal balance? debit side (increases)

JOURNALIZING CASH RECEIPTS WITH DISCOUNTS Oct 1. Received cash on account from Cumberland Center, covering Sales Invoice No. 74 for $1,200.00, less 2% discount. Receipt No What accounts are impacted and how? Accounts Rec/Cumberland Center – decreases as ? Cash – Increase as ? Sales Discount – Increases as? CashSales DiscountAcct. Rec/Cumberland Center

JOURNALIZING CASH RECEIPTS WITH DISCOUNTS Oct 1. Received cash on account from Cumberland Center, covering Sales Invoice No. 74 for $1,200.00, less 2% discount. R Enter Accounts Receivable as the original invoice amount. 1.Enter the date. 2.Enter Account title as Cumberland Center. 3.DOC No. = R Enter amount of sales discount. 6.Enter Cash debit as Accounts receivable - sales tax = Cash amount Cash Receipts Journal Page: DateAccount Title Doc No Post. Ref General Accounts Receivable Credit Sales Credit Sales Tax Payable Credit Sales Discount Debit Cash Debit DebitCredit 1 TS Country CraftersR

TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL

TERMS REVIEW cash sale credit card sale point-of-sale (POS) terminal terminal summary batch report batching out cash receipts journal sales discount

Assignment Work Together 10-2