1. Chapter 7 Specialized Journals and Subsidiary Ledgers
HFT 2403
Chapter 7
Specialized Journals and
Subsidiary Ledgers

2. Specialized Journals Leads to greater efficiency in a manual system
Allows for reduced postings to the general ledger
Daily transactions are recorded in the subsidiary ledger and updated periodically
Cash Journal
Payroll Journal

3. General Ledger and Control Accounts
Control accounts are used for general ledger accounts that have numerous entries. They supply the detail for each account
Accounts Receivable
Accounts Payable
Prepaid Insurance
Prepaid Expenses

4. Control Accounts
Balances of the control accounts must equal the balance recorded on the general ledger
Accounts Receivable Subsidiary Ledger– balances due from each guest or city ledger (direct bill) account must total & equal the general ledger
Accounts Payable Subsidiary Ledger– amounts due to each supplier must total and equal the amount recorded on the general ledger

5. Lodging Industry Accounts Receivable - Trade
Guest Ledger – Guests currently in house or house accounts to be settled on a current basis
City Ledger – Departed guests. Have credit terms established. Can be guest or non-guest related.

6. Specialized Journals Advantages
Increased efficiency – one line used in the journal
Time saved in posting to general ledger accounts – only column totals are posted to the general ledger, not individual detail

7. Specialized Journals Improvements to internal controls
Separation of duties in recording transactions
Reduction of errors in general ledger postings as the number of transactions are reduced

8. Types of Journals Used Sales journal – S, SJ, or IJ
Cash receipts journal – CR or CJ
Purchases journal – P or PUR
Cash disbursements journal - CD
General journal - GJ

9. Requirements for Posting
Supporting evidence / Documentation
Posting references column
Amount

10. Sales Journal Used for posting all transactions on accounts
May be either cash or charge transactions
Also posted to customers individual subsidiary ledger simultaneously

11. Cash Receipts Journal Used to record cash inflows only
Headers to journal would include offset accounts to post credit to:
Accounts Receivable
Sales
Other

12. Purchases Journal Used to record all purchases on account
Headers can include different accounts for the type of purchase i.e. – food purchases, beverage purchases, supply purchases

13. Cash Disbursements Journal
Records all transactions involving the payment of cash
Accounts payable
Petty cash
Payroll
Immediate disbursements

14. Payroll Journal Records Payroll Expenses Salary expense Deductions
FWT – Income Taxes
FICA / Medicare
State & Local Taxes
Insurance
Other

15. General Journal A “catch-all” journal
Used to record transactions that do not fit into a specialized journal

16. Specialized Journals for Lodging
Front office cash receipts and disbursements journal
Allowance journal
Transfer journal

17. Homework
Problem 5
Problem 7
Problem 9