1. Section 1The Sales Journal What You’ll Learn  To identify the special journals and how they are used.  How to record sales of merchandise on account in a sales journal.  How to post from the sales journal to the accounts receivable subsidiary ledger accounts.  How to foot, prove, total, and rule the sales journal.  How to post column totals from the sales journal to the general ledger. What You’ll Learn  To identify the special journals and how they are used.  How to record sales of merchandise on account in a sales journal.  How to post from the sales journal to the accounts receivable subsidiary ledger accounts.  How to foot, prove, total, and rule the sales journal.  How to post column totals from the sales journal to the general ledger.

2. Why It’s Important The use of the sales journal provides a systematic method of keeping track of sales on account. Why It’s Important The use of the sales journal provides a systematic method of keeping track of sales on account. Section 1The Sales Journal (cont'd.) Key Terms  special journals  sales journal  footing Key Terms  special journals  sales journal  footing

3. Section 1The Sales Journal (cont'd.) Special Journals Special journals have amount columns used to record debits and credits to specific general ledger accounts. Special Journals Special journals have amount columns used to record debits and credits to specific general ledger accounts. Sales Journalsales of merchandise on account Sales Journalsales of merchandise on account Cash Receipts Journalreceipt of cash Cash Receipts Journalreceipt of cash Purchases Journalpurchase of any asset on account Purchases Journalpurchase of any asset on account Cash Payments Journalpayment of cash, including payments by check Cash Payments Journalpayment of cash, including payments by check JournalTransaction JournalTransaction

4. The Sales Journal The sales journal is a special journal used to record sales of merchandise on account. The Sales Journal The sales journal is a special journal used to record sales of merchandise on account. Section 1The Sales Journal (cont'd.)  Record the amount of the merchandise sold on account  Record the amount of the merchandise sold on account  Record the amount of sales tax on the sale  Record the amount of sales tax on the sale  Record the total amount to be received from the customer on account

5. Recording Sales of Merchandise on Account Section 1The Sales Journal (cont'd.) Business Transaction JOURNAL ENTRY On December 1, On Your Mark sold merchandise on account to Casey Klein for $200 plus $12 sales tax, Sales Slip 50.

6. Posting a Sales Journal Entry to the Accounts Receivable Subsidiary Ledger To keep the balances of the customer accounts current, sales journal transactions are posted daily to the accounts receivable subsidiary ledger. Posting a Sales Journal Entry to the Accounts Receivable Subsidiary Ledger To keep the balances of the customer accounts current, sales journal transactions are posted daily to the accounts receivable subsidiary ledger. Section 1The Sales Journal (cont'd.)

7. Footing, Totaling, Proving, and Ruling the Sales Journal Section 1The Sales Journal (cont'd.)

8. Posting the Total of the Sales Credit Column Next, transfer the amount in the Sales column to the general ledger. Posting the Total of the Sales Credit Column Next, transfer the amount in the Sales column to the general ledger. Section 1The Sales Journal (cont'd.)

9. Posting the Total of the Sales Tax Payable Credit Column Next, transfer the amount in the Sales Tax Payable column to the general ledger. Posting the Total of the Sales Tax Payable Credit Column Next, transfer the amount in the Sales Tax Payable column to the general ledger. Section 1The Sales Journal (cont'd.)

10. Posting the Total of the Accounts Receivable Debit Column The last amount to be transferred to the general ledger is the Accounts Receivable Debit column. Posting the Total of the Accounts Receivable Debit Column The last amount to be transferred to the general ledger is the Accounts Receivable Debit column. Section 1The Sales Journal (cont'd.)

11. Proving the Sales Journal at the End of a Page If a business has many transactions in one month, and it is impossible to fit them onto one journal page, the journal page must be totaled and ruled before a new page is started. Proving the Sales Journal at the End of a Page If a business has many transactions in one month, and it is impossible to fit them onto one journal page, the journal page must be totaled and ruled before a new page is started. Section 1The Sales Journal (cont'd.)

12. Section 2The Cash Receipts Journal What You’ll Learn  How to record transactions in the cash receipts journal.  How to post from the cash receipts journal to accounts receivable subsidiary ledger accounts.  How to post amounts in the General Credit column of the cash receipts journal to general ledger accounts.  How to post column totals from the cash receipts journal to the general ledger.  How to prepare a schedule of accounts receivable. What You’ll Learn  How to record transactions in the cash receipts journal.  How to post from the cash receipts journal to accounts receivable subsidiary ledger accounts.  How to post amounts in the General Credit column of the cash receipts journal to general ledger accounts.  How to post column totals from the cash receipts journal to the general ledger.  How to prepare a schedule of accounts receivable.

13. Why It’s Important Use of the cash receipts journal will save time and reduce errors. Why It’s Important Use of the cash receipts journal will save time and reduce errors. Section 2The Cash Receipts Journal (cont'd.) Key Terms  cash receipts journal  schedule of accounts receivable Key Terms  cash receipts journal  schedule of accounts receivable

14. The Cash Receipts Journal A special journal used to record all cash receipt transactions. The Cash Receipts Journal A special journal used to record all cash receipt transactions. Section 2The Cash Receipts Journal (cont'd.)

15. Recording Cash from Charge Customers Section 2The Cash Receipts Journal (cont'd.) Business Transaction On December 5, On Your Mark received $212 from Casey Klein to apply on account, Receipt 301. JOURNAL ENTRY

16. Section 2The Cash Receipts Journal (cont'd.) Business Transaction On December 12, On Your Mark received $1,470 from South Branch High School Athletics in pay- ment of Sales Slip 51 for $1,500 less the discount of $30, Receipt 302. JOURNAL ENTRY Recording Cash Received on Account, Less a Cash Discount

17. Section 2The Cash Receipts Journal (cont'd.) Business Transaction On December 15, On Your Mark records the cash sales for the first two weeks of December, $3,000, and $180 in related sales taxes, Tape 55. JOURNAL ENTRY Recording Cash Sales

18. Posting to the Accounts Receivable Subsidiary Ledger Daily postings are made from the Accounts Receivable Credit column to the accounts receivable subsidiary ledger. Posting to the Accounts Receivable Subsidiary Ledger Daily postings are made from the Accounts Receivable Credit column to the accounts receivable subsidiary ledger. Section 2The Cash Receipts Journal (cont'd.)

19. Posting the General Credit Column Daily postings are made from the General Credit column of the cash receipts journal to the appropriate accounts in the general ledger. Posting the General Credit Column Daily postings are made from the General Credit column of the cash receipts journal to the appropriate accounts in the general ledger. Section 2The Cash Receipts Journal (cont'd.)

20. Footing, Totaling, Proving, and Ruling the Cash Receipts Journal To complete the cash receipts journal, follow these steps: Footing, Totaling, Proving, and Ruling the Cash Receipts Journal To complete the cash receipts journal, follow these steps: 1. Draw a single rule across the six amount columns, below the last transaction. Done to show addition. 2. Foot the columns. 3. Test for the equality of debits and credits. 1. Draw a single rule across the six amount columns, below the last transaction. Done to show addition. 2. Foot the columns. 3. Test for the equality of debits and credits. Section 2The Cash Receipts Journal (cont'd.)

21. Footing, Totaling, Proving, and Ruling the Cash Receipts Journal (cont'd.) 4.In the Date column, on the line below the single rule, enter the date the journal is being totaled. 5.On the same line in the Account Name column, enter the word “Totals.” 6.Enter the columns totals, in ink, just below the footings. 7.Double-rule the amount columns. 4.In the Date column, on the line below the single rule, enter the date the journal is being totaled. 5.On the same line in the Account Name column, enter the word “Totals.” 6.Enter the columns totals, in ink, just below the footings. 7.Double-rule the amount columns. Section 2The Cash Receipts Journal (cont'd.)

22. Posting Column Totals to the General Ledger  There are six amount columns in the cash receipts journal used by On Your Mark. Only five of the column totals, however, are posted to the general ledger.  The total of the General Credit column is not posted. The entries in this column have already been posted, individually, to the general ledger accounts.  There are six amount columns in the cash receipts journal used by On Your Mark. Only five of the column totals, however, are posted to the general ledger.  The total of the General Credit column is not posted. The entries in this column have already been posted, individually, to the general ledger accounts. Section 2The Cash Receipts Journal (cont'd.)

23. Posting Column Totals to the General Ledger (cont'd.)  The total in each of the other five amount columns is posted to the general ledger account named in the column heading. Section 2The Cash Receipts Journal (cont'd.)

24. Proving the Accounts Receivable Subsidiary Ledger Section 2The Cash Receipts Journal (cont'd.) A schedule of accounts receivable is a report listing each charge customer, the balance in the customer’s account, and the total amount due from all customers.

25. Proving the Accounts Receivable Subsidiary Ledger (cont'd.) Section 2The Cash Receipts Journal (cont'd.)