Journalizing Sales and Cash Receipts Using Special Journals Chapter 10, Section 1

Review Special Journals What kind of transactions are recorded in each special journal? Purchases Cash Payments Sales Cash Receipts What is the difference between a special amount column and a general amount column?

Sales on Account Customer – person who buys merchandise or services Sales Tax – tax on sale of merchandise or services; required by most states and some cities Stated as a percentage of sales Collected by business then paid to gov’t agency Sales tax is recorded as a liability. Sales Tax Payable Credit Normal Balance  

Sales of Merchandise on Account What accounts are affected and how? Debit or credit? What is the source document? What journal? Accounts Receivable/ Customer Name Sales Sales Tax Payable Credit Normal Balance Debit Normal Balance Credit Normal Balance   

Sales Invoice

Sales Journal CONCEPT: Realization of Revenue Revenue is recorded at the time goods or services are sold.

Recording a Sale on Account November 3. Sold merchandise on account to Village Crafts, $540.00, plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76. 1 2 3 4 5 6 1. Write the date. 2. Write the customer name. 3. Write the sales invoice number. 4. Write the total amount owed by the customer. 5. Write the sales amount. 6. Write the sales tax amount.

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

Problems Work Together 10-1 (Text pg. 275) On Your Own 10-1 (Text pg. 275) Application 10-1 (Text pg. 289) Study Guide 10