CHAPTER FIFTEEN THE SALES JOURNAL

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Record sales of merchandise on credit in a sales journal. 2. Total, prove, and rule the sales journal. 3. Post from the sales journal. THE SALES JOURNAL Chapter Outcomes:

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Recording Transactions in the Sales Journal One way to reduce the repetition in journalizing and posting is to have a special journal for all sales of merchandise on credit. This special journal is called a sales journal.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Advantages to using the Sales Journal All entries for sales of merchandise on credit are grouped in one place. Important facts about each transaction are written on a single line.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Advantages to using the Sales Journal (continued) There is no need to enter account titles or to write a long explanation for each transaction. The Sales Journal allows for great division of labor–one person can be put in charge of entering sales.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Posting From the Sales Journal Posting is simplified using the Sales journal. Money columns are pencil-footed and the totals are posted to the appropriate accounts.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Posting From the Sales Journal (continued) The single posting to each account saves time and reduces the possibility of error.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Accounting Terminology Cross-footing Posting reference S Sales journal Special journal

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Summary The sales journal is a special journal that is used for recording sales of merchandise on credit. It allows a business to save time and avoid repetition in the journalizing and posting of its credit sales.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Summary (continued) The Sales Journal organizes, in one place, all the information about credit sales. The columns further organize all the information for one transaction on a single line. The information needed for entries in the sales journal is taken from copies of the sales invoices or from copies of the sales slips.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Summary (continued) At the end of the month, the figures in the sales journal are added. The column totals are posted to the general ledger as a debit to the Accounts Receivable account, a credit to the Sales Tax Payable account, and a credit to the Sales account.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Summary (continued) Cross-footing is the process of checking the accuracy of column totals.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Summary (continued) The form of the journal can be tailored to meet the individual needs of each business.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved Investigating on the Internet As a research assignment, access the web site for MAB ® paints and report the sources of information that might concern sales of merchandise.

McGraw-Hill/Irwin Accounting Fundamentals, 7/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved The sales journal is a special journal that is used for recording sales of merchandise on credit. 2. The sales journal form can be modified to meet the needs of each business. 3. An advantage for using a sales journal is that there is no need to enter account titles or to write long explanations of each transaction. Topic Quiz Answer the following true/false questions: TRUE