9 - 1 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

Special Journals:
Sales and Cash Receipts
Chapter 9
9 - 2 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Objective 1
Journalizing sales on
account in a sales journal.
9 - 3 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
Gross sales
= Amount of units sold
Sales price per unit
Amount is credited to
the Revenue account.
Normal balance is a credit.
9 - 4 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
Assume that Chous Toy
Shop had $3,000 in sales.
$1,800 were cash sales
and $1,200 were charges.
A customer received a $10 price
reduction for defective merchandise.
How can these transactions be recorded?
9 - 5 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
Accounts Affected Category Rules
Cash Asset Dr. 1,800
Accounts Receivable Asset Dr. 1,200
Sales Revenue Cr. 3,000
July 18
Cash 1,800
Accounts Receivable 1,200
Sales 3,000
To record sales for July 18
9 - 6 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
Sales returns and allowances =
Amount allowed for defective merchandise
Amount is debited in the journal entry.
Normal balance is a debit.
9 - 7 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
Accounts Affected Category Rules
Sales Returns and Contra- Dr. 10
Allowances revenue

Accounts Receivable, Asset Cr. 10
Michelle Reese
Accounts Receivable
1,200 10
9 - 8 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
What is a sales discount?
It is a percent decrease in the amount
collected from a credit customer.
9 - 9 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
What is the meaning of the term 2/10, n/30?
It means a customer will be granted a 2%
discount if the account is paid in 10 days.
Otherwise, the full amount (n = net)
is to be paid in 30 days.
9 - 10 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
July 24
Cash 39.20
Sales Discount .80
Accounts Receivable, Michelle Reese 40.00
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
9 - 11 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-1 (Sellers View
of a Merchandise Company)
What is sales tax payable?
It is a percent multiplied times the gross
amount of the sale collected from customers.
The business has a liability to the taxing
authority for the amounts collected.
9 - 12 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Objectives
2 and 3
Posting from a sales journal
to the general ledger.
Recording to the accounts
receivable subsidiary ledger
from a sales journal.
9 - 13 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
The sales journal records sales of
merchandise on account.
The cash receipts journal records
receiving cash from any source.
Learning Unit 9-2
(Special Journals)
The purchases journal records buying
merchandise or other items on account.
The cash payments journal records payments.
9 - 14 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-2
(Special Journals)
Subsidiary Ledger
A separate record for each credit
customer must be set up.
9 - 15 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-2
(Special Journals)
Recorded sales are posted in total to the Sales
account and the Accounts Receivable account.
They are also recorded as debits
to individual customer accounts.
9 - 16 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-2
(Special Journals)
Sales Returns
and Allowances
Sales Discounts
Sales
Inventory
Accounts
Receivable
Cash
Partial General Ledger
Roe Company
Mels Dept. Store
Hals Clothing
Bevans
Company
Accounts Receivable
Subsidiary Ledger
9 - 17 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Objective 4
Preparing, journalizing,
recording, and posting
a credit memorandum.
9 - 18 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-3
(The Credit Memorandum)
What is a credit memorandum?
It shows amounts that were deducted
from the balance the customer owes.
They are contra-revenue accounts
with a normal debit balance.
These are recorded in the general journal
and posted to a subsidiary ledger.
9 - 19 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-3
(The Credit Memorandum)
Sales Returns and
Credit Account PR Allowances Dr.
Date Memo No. Credited Accts. Rec. Cr.
200x
April 12 1 Bevans 600.00
9 - 20 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Objective 5
Journalizing and posting
transactions using a cash
receipts journal, as well
as recording to the accounts
receivable subsidiary ledger.
9 - 21 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-4
(Cash Receipts Journal)
The cash receipts journal records
the receipt of cash from any source.
The number of columns
varies with each business.
The cash receipt journal
speeds up the posting process.
9 - 22 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 9-4
(Cash Receipts Journal)
Debit Column
Cash
Sales Discount
Credit Column
Accounts Receivable
Sales
Sundry
9 - 23 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
End of Chapter 9