1. CHAPTER THIRTEEN SPECIAL JOURNALS

2. 4Designed for recording only certain kinds of transactions 4Save time journalizing and posting transactions: éTransactions entered on a single line. éColumn totals are posted periodically. 4General Journal still needed for some transactions.

3. SPECIAL JOURNALS SPECIAL JOURNALTRANSACTIONS Sales JournalSales on account Only sales “on account,” not cash sales.

4. SPECIAL JOURNALS SPECIAL JOURNALTRANSACTIONS Sales JournalSales on account Any transaction in which cash is received. Cash Sales are recorded in this journal. Cash Receipts JournalCash receipts

5. SPECIAL JOURNALS SPECIAL JOURNALTRANSACTIONS Sales JournalSales on account “ON ACCOUNT” purchases of MERCHANDISE only Cash Receipts JournalCash receipts Purchases Journal Purchases on account

6. SPECIAL JOURNALS SPECIAL JOURNALTRANSACTIONS Sales JournalSales on account Cash Receipts JournalCash receipts Purchases Journal Purchases on account Cash Payments JournalCash payments Any transaction in which cash is paid.

7. SALES TRANSACTIONS April 4 Made sale no. 133C on account to Enrico Lorenzo, $1,520 plus $76 sales tax April 10 Made sale no. 134C on account to Brenda Myers, $40 plus $22 sales tax April 18 Made sale no. 105D on account to Edith Walton, $980 plus $49 sales tax April 21 Made sale no. 202B on account to Susan Chang, $620 plus $31 sales tax April 24 Made sale no. 162A on account to Heidi Schwitzer, $1,600 plus $80 sales tax Let’s review the General Journal entries for these transactions.

8. GENERAL JOURNAL DATEDESCRIPTIONPRDEBITCREDIT 1 2 3 4 5 6 7 8 9 10 11 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 Sales 1,520 00 Sales Tax Payable 76 00 sale no. 133C 4 lines are used to prepare one journal entry!!

9. GENERAL JOURNAL DATEDESCRIPTIONPRDEBITCREDIT 1 2 3 4 5 6 7 8 9 10 11 Apr. 4 Accts. Receivable/E. Lorenzo 1,596 00 Sales 1,520 00 Sales Tax Payable 76 00 sale no. 133C 10Accts. Receivable/B. Myers 462 00 440 00 Sales Sales Tax Payable sale no. 134C 22 00

10. GENERAL JOURNAL continued DATEDESCRIPTIONPRDEBITCREDIT Accts. Receivable/E. Walton12 13 14 15 16 17 18 19 20 21 22 18 Sales Sales Tax Payable 1,029 00 980 00 49 00 sale no. 105D Accts. Receivable/S. Chang Sales Sales Tax Payable sale no. 202B 651 00 620 00 31 00 21

11. GENERAL JOURNAL continued DATEDESCRIPTIONPRDEBITCREDIT Accts. Receivable/H. Schwitzer23 24 25 26 27 28 29 30 31 32 33 24 Sales Sales Tax Payable 1,680 00 1,600 00 80 00 sale no. 162A All the entries involved the same accounts!!

12. SALES JOURNAL 4A column for each account involved in “Sales on account” transactions: éAccounts Receivable (Debit), Sales (Credit), Sales Tax Payable (Credit) 4Four steps for entering a transaction: éStep #1 Enter Date. éStep #2 Enter Sales number. éStep #3 Enter Customer. éStep #4 Enter Dollar amount.

13. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr4133C Sales Credit Enrico Lorenzo 1,596 1,52076 The whole transaction is recorded on ONE line. Account names are not entered. Page 6

14. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Now let’s look at posting from the Sales Journal. Page 6

15. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #1a Total the amount columns. 5,418 5,160 258 Page 6

16. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #1b Verify that the total of the debit column equals the total of the credit columns. 5,418 5,160 258 Page 6

17. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 5,418 5,160 258 Debits $5,418 Credits $5,418 Page 6

18. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #1c Rule the columns. 5,418 5,160 258 Page 6

19. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Let’s post the Accounts Receivable total. 5,418 5,160 258 Page 6

20. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 112,000 30 Balance Step #2 Enter the date.

21. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 112,000 30 Balance Step #3 Enter the amount. 5,418

22. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 112,000 30 Balance Step #4 Enter the new balance. 5,418 17,418

23. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 112,000 30 Balance Step #5 Enter “S” for Sales Journal and the journal page number. 5,418 17,418 S6

24. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Step #6 Enter the account number below the column total. 5,418 5,160 258 Page 6 (122)

25. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Steps #2 - #6 will be repeated for the Sales and Sales Tax Payable columns. 5,418 5,160 258 Page 6 (122)(401)(231)

26. SALES JOURNAL Date To Whom SoldPR Accts. Receivable Debit/Sales Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. A company that does not charge sales tax, such as a wholesaler, will use a single column Sales Journal. Page 1

27. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 Each transaction must also be posted to the Accounts Receivable ledger. 5,418 5,160 258 Page 6 (122)(401)(231)

28. ACCOUNTS RECEIVABLE LEDGER Name: DATEITEMPRDEBITCREDIT BALANCE Enrico Lorenzo 20-- Apr. 1,5964 Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 1,596S6 4Step #1 Enter the date. 4Step #2 Enter the amount. 4Step #3 Update the balance. 4Step #4 Enter “S” (Sales Journal) and “6” (page number) in the PR column.

29. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 “  ” is entered to indicate the transaction has been posted to the Accounts Receivable ledger. 5,418 5,160 258 Page 6 (122)(401)(231) 

30. SALES JOURNAL Date To Whom SoldPR Accts. Rec. Debit Sales Tax Pay. Credit 1 2 3 4 5 6 7 8 9 10 11 Sale No. 20-- Apr133C Sales Credit Enrico Lorenzo 1,596 1,52076 4 10134CBrenda Myers46244022 18 105D Edith Walton1,02998049 21202B Susan Chang651 620 31 24 162AHeidi Schwitzer 1,680 1,600 80 The other sales are posted to the Accounts Receivable ledger in the same manner. 5,418 5,160 258 Page 6 (122)(401)(231)     

31. CASH RECEIPTS JOURNAL 4Used to record only cash receipt transactions 4Includes separate columns for: éCash (Debit) éBank Credit Card Expense (Debit) éAccounts Receivable (Credit) éSales (Credit) éSales Tax Payable (Credit) éGeneral (Credit)

32. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit EXAMPLE: April 14, received cash on account from Enrico Lorenzo for sale no. 133C, $1,596.

33. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Step #1 Enter date. Apr 20-- 14

34. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Step #2 Enter name of account credited. Apr 20-- 14 Enrico Lorenzo

35. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo This column is used for two purposes: 1.To identify the customer name for any collection on account. This column is used whenever the Accounts Receivable Credit column is used. 2.To enter the appropriate account name whenever the General Credit column is used.

36. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Step #3 Enter the dollar amounts. Apr 20-- 14 Enrico Lorenzo1,596

37. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596

38. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 Cash was also received on account on April 20th and 28th.

39. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462

40. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029

41. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029

42. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Now let’s journalize cash sales for April 30th of $3,600 plus tax of $180.

43. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 This column is left blank for cash sales. 30

44. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 3,600180  = 3,780 Total Credits = Total Debits

45. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Bank credit card sales are similar to cash sales, no entry is made in the “Account Credited” column. 30

46. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 Bank Credit Card Sales of $2,500 were made this month. 2,500

47. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 Sales Tax on these sales was $125. 2,500 125

48. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 The service charge on these bank credit card sales was $100. 2,500 125100

49. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 The cash received was $2,525 [($2,500sales + $125tax) - $100service chg]. 2,500 1251002,500

50. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Example: April 30, received cash for rent revenue $600. 30

51. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 We need to credit Rent Revenue and debit Cash. 30

52. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Since there is no column for Rent Revenue, we must use the “General Credit” column. 30 600

53. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 When the “General Credit” column is used, the “Account Credited” column must identify the specific General Ledger account affected. 30 600 Rent Revenue

54. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600

55. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Borrowing money would be recorded in a similar manner. 30 600 Rent Revenue 30 Notes Payable 3,000

56. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000

57. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton 1,029 On a daily basis, the amounts in the “General Credit” column are posted. 30 600 Rent Revenue 30 Notes Payable 3,000

58. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. RENT REVENUE 412 20-- Apr. 11,800 30 Balance “CR” for Cash Receipts Journal. 600 2,400CR7

59. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 General Ledger account number 30 600 Rent Revenue 30 Notes Payable 3,000 412

60. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Notes Payable is posted in the same manner. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201

61. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 At the end of the month, the columns are totaled. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087

62. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 Next, we verify that the debit columns equal the total of the credit columns.

63. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 $3,600 + $3,087 + $6,100 + $305 = $13,092 Credits

64. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 $100 + $12,992 = $13,092 Debits DEBITS = CREDITS!!!

65. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 Each column total (except General) is posted at the end of the month.

66. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS RECEIVABLE 122 20-- Apr. 112,000 30 Balance “CR” for Cash Receipts Journal 5,418 17,418 S6 30CR7 3,08714,331

67. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) Account Number indicates total was posted.

68. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) (401) (231)(513)(101) Remaining columns are posted in the same manner.

69. CASH RECEIPTS JOURNAL Bank C C Exp. Debit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Cash Debit 1,596 Sales Tax Pay. Credit Sales Credit Accts. Rec. Credit General Credit 1,596 462 1,029 3,6001803,780 2,500 1251002,500 600 3,000 3,600 3,087 6,100 305 100 12,992 (122) (401) (231)(513)(101)  “  ” indicates the column total is not posted.

70. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 Postings to the subsidiary Accounts Receivable ledger are made daily. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087

71. ACCOUNTS RECEIVABLE LEDGER Name: DATEITEMPRDEBITCREDIT BALANCE Enrico Lorenzo 20-- Apr. 1,5964 Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 1,596S6 141,596CR7

72. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 “  ” indicates transaction was posted to the Accounts Receivable subsidiary ledger. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087 

73. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 The payments by Brenda and Edith are posted in the same manner. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087   

74. CASH RECEIPTS JOURNAL Date Account CreditedPR General Credit 1 2 3 4 5 6 7 8 9 10 11 Page 7 Accts. Rec. Credit Apr 20-- 14 Enrico Lorenzo1,596 20Brenda Myers 462 28 Edith Walton1,029 “  ” is entered into the PR column for cash sales and bank credit card sales. 30 600 Rent Revenue 30 Notes Payable 3,000 412 201 3,600 3,087     

75. PURCHASES JOURNAL 4Purchases of MERCHANDISE for resale 4Only ON ACCOUNT éCash purchases would be recorded in the Cash Payments Journal. 4Single column format éPurchases Debit/Accounts Payable Credit, OR 4Three column éPurchases Debit, Freight-In Debit, Accounts Payable Credit

76. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. For our example, we will use a single column Purchases Journal. Page 8

77. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. Example: On April 4th, purchased merchandise from Compucraft, Inc. $3,300 Invoice no. 631, dated April 2, n/30. Page 8 20-- Apr4 631Compucraft, Inc. 3,300

78. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. All purchases transactions are journalized in the same manner. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300

79. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. At the end of the month, the column is totaled, ruled, and posted to the General Ledger accounts. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600

80. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. PURCHASES 501 20-- Apr. 117,400 30 Balance “P” for Purchases Journal 20,600 38,000 P8 

81. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501) Account Number indicates column total has been posted.

82. FOUR-COLUMN ACCOUNT Account: Account No. DATEITEMPRDR.CR. BALANCE DR.CR. ACCOUNTS PAYABLE 202 20-- Apr. 14,800 30 Balance 20,600 25,400 P8 

83. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501) (202) Transactions are posted to the Accounts Payable ledger on a daily basis.

84. ACCOUNTS PAYABLE LEDGER Name: DATEITEMPRDEBITCREDIT BALANCE Compucraft, Inc. 20-- Apr. 3,3004 Address: 5240 Tousley Court, Indianapolis, IN 46224-5678 3,300P8

85. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501) (202) “  ” is placed in the PR column when posting is completed. 

86. PURCHASES JOURNAL Date From Whom PurchasedPR Purchases Debit/ Accounts Payable Credit 1 2 3 4 5 6 7 8 9 10 11 Invoice No. Page 8 20-- Apr4 631Compucraft, Inc. 3,300 8 927DDatasoft2,500 11804EZX Corp. 8,700 17611 Printpro Corp. 800 23 1465 Televax, Inc.5,300 20,600 (501) (202) The remaining transactions are posted in the same manner.     

87. CASH PAYMENTS JOURNAL 4Used to record only cash payments transactions 4Every transaction in the journal will involve a credit to the Cash account. 4Columns are set up in the journal for the most commonly affected accounts in cash payments transactions.

88. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 Example: Payment of rent, $2,400 on April 2 Check No.

89. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 All cash payments (except those from Petty Cash) should be made by check for good internal control. 20-- Apr. 2 Check No. 307

90. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 This column is used for two purposes: 1. To identify a supplier name for any payment on account 2. To enter the appropriate account name whenever the “General Debit” column is used 20-- Apr. 2 Check No. 307 2,400Rent Expense

91. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400

92. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 Example: On April 4 $1,400 of merchandise was purchased for cash. 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308

93. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400

94. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 Example: On April 10 payment was made on account, $4,800. 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small

95. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800

96. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable Example: On April 14 payment was made on a note payable, $2,000. 2,000

97. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000

98. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable Example: On April 22 owner withdrew cash for personal use, $1,600. 2,000 22 311 Gary L. Fishel, Drawing 1,600

99. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600

100. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable Example: On April 24 made payment on account within the discount period. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp.

101. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613

102. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable On a daily basis, the amounts in the “General Debit” column are posted. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp.

103. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable “CP” for Cash Payments journal is entered in the ledger account’s PR column, and the account number is entered in the journal’s PR column. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312

104. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable At the end of the month, the columns are totaled, equality of debits and credits is verified, and totals are posted to the General Ledger. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000

105. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813 6,000  13,500  1,400 = 20,900 87  20,813 = 20,900

106. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813  “  ” indicates the column should not be posted.

107. CASH PAYMENTS JOURNAL 1 2 3 4 5 6 7 8 9 10 11 Page 12 Cash Credit Purch. Disc. Credit Purchases Debit Accts. Pay. Debit General Debit 2,400 1,400 4,800 2,000 1,600 8,700 878,613 6,000 13,500 1,400 87 20,813  Account numbers indicate the total were posted. (202)(501)(501.2)(101)

108. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable Transactions affecting the Accounts Payable ledger are posted daily. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000

109. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable “  ” is entered to indicate the transaction has been posted. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000  

110. CASH PAYMENTS JOURNAL Date Account DebitedPR General Debit 1 2 3 4 5 6 7 8 9 10 11 Page 12 20-- Apr. 2 Check No. 307 2,400Rent Expense 4308 10309 B.B. Small 14 310Notes Payable “  ” is also entered for transactions that do not require individual postings. 2,000 22 311 Gary L. Fishel, Drawing 1,600 24 312 EZX Corp. 521 201 312 6,000   