CHAPTER 10CHAPTER 10

Journalizing Sales & Cash Receipts

Using Special Journals

10-1 JOURNALIZING SALES ON 10-1 JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNALACCOUNT USING A SALES JOURNAL page 270

A tax on the sale of merchandise is called Sales Tax•Stated as a percentage.•Need accurate records of (1)total sales (2)total sales tax collected.•The amount of sales tax collected is a liability until paid to the

the government agency.

SALES OF MERCHANDISE ON ACCOUNTSALES OF MERCHANDISE ON ACCOUNTpage 271

A sale of merchandise may be (1) on account or (2) for cash.

A sale of merchandise increases revenue.

Revenue is recorded at time of saleNOT when cash is received.

A sale for which cash will be receivedat a later date is known as a sale on account or charge sale.

SALES JOURNALSALES JOURNAL page 272

A sales journal is a special journal used ONLY to record sales of merchandise on account.

SALES INVOICESALES INVOICEA source document for sales on accountA source document for sales on account page 272

SALE ON ACCOUNTSALE ON ACCOUNT

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page 273

November 3. Sold merchandise on account to Village Crafts, $540.00, plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76.

1. Write the date.

6. Write the sales tax amount.

2. Write the customer name.

3. Write the sales invoice number.

4. Write the total amount owed by the customer.

5. Write the sales amount.

TOTALING, PROVING, AND RULING TOTALING, PROVING, AND RULING A SALES JOURNALA SALES JOURNAL page 274

At the end of each month Hobby Shack totals, proves, and rules its sales journal. Prove and rule just like all other journals.

10-2 JOURNALIZING CASH RECEIPTS USING 10-2 JOURNALIZING CASH RECEIPTS USING A CASH RECEIPTS JOURNAL A CASH RECEIPTS JOURNAL pages 276- 277

UPC (Universal Product Code)UPC (Universal Product Code)

Cash Register Receipt

Cash Register Receipt

Point-of-Sale (POS) Terminal Receipt

Point-of-Sale (POS) Terminal Receipt

(continued on next slide)

Processing Sales Transactions•A sale in which cash is received for the total amount of the sale at the time of the transaction is called a cash sale. •If a credit card is used it is called a charge sale.

Is scanned in into POS terminal

A computer used to collect, store,and report all infoof a sales trans.is a POS terminal.

PROCESSING SALES TRANSACTIONSPROCESSING SALES TRANSACTIONSpage 277

Terminal SummaryTerminal Summary

Batch ReportBatch Report

(continued from previous slide)

Summarizes cash& credit card salesof a point of saleterminal.

A report of creditcard sales producedby a POS terminal.

CASH RECEIPTS JOURNALCASH RECEIPTS JOURNALpage 278

A cash receipts journal is a special journal used ONLY to record cash receipt transactions.

To encourage early payment Hobby Shack allows customers who pay early to take a deduction from the invoice amount called a sales discount.•Customer pays less than invoice amount that was recorded in sales account.•Sales discounts reduce the amount of cash HS receives on sales on account.•Use special amount columns to record.

CASH AND CREDIT CARD SALESCASH AND CREDIT CARD SALES

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November 4. Recorded cash and credit card sales, $5,460.00, plus sales tax, $327.60; total, $5,787.60. Terminal Summary 34.

1. Write the date.2. Place a check mark in the Account Title column.3. Write the terminal summary document number.4. Place a check mark in the Post. Ref. column.5. Write the sales amount.6. Write the sales tax amount.7. Write the cash amount.

77

CASH RECEIPTS ON ACCOUNTCASH RECEIPTS ON ACCOUNT

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page 280

November 6. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90.

1. Write the date.

2. Write the customer’s name.

3. Write the receipt number.

4. Write the credit amount.

5. Write the debit amount.

JOURNALIZING CASH RECEIPTS ON JOURNALIZING CASH RECEIPTS ON ACCOUNT WITH SALES DISCOUNTSACCOUNT WITH SALES DISCOUNTS

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page 282

November 7. Received cash on account from Cumberland Center, $1,176.00, covering Sales Invoice No. 74 for $1,200.00, less 2% discount, $24.00. Receipt No. 91.

4. Write the original invoice amount.1. Write the date.

2. Write the customer’s name.

3. Write the receipt number.

5. Write the amount of sales discount.

6. Write the debit to cash.

$1,200.00 x 2% = $24 sales discount

TOTALING, PROVING, AND RULING A TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNALCASH RECEIPTS JOURNAL page 283

At the end of each month Hobby Shack totals, proves, and rules its cash receipts journal. Prove and rule just like all other journals.

10-3 RECORDING TRANSACTIONS USING A 10-3 RECORDING TRANSACTIONS USING A GENERAL JOURNALGENERAL JOURNAL page 285

•Sales Return - Credit allowed for the sales price of returned merchandise, resulting in a decrease in the vendor’s account receivable. •Sales Allowance - Credit allowed for part of the sales price of

merchandise that is not returned, decreasing vendor’s accountsreceivable.

•Credit Memo- source doc.prepared by vendor showingamount deducted for returnsand allowances.

Credit Memorandum for Sales Returns & Allowances

JOURNALIZING SALES RETURNS AND ALLOWANCESJOURNALIZING SALES RETURNS AND ALLOWANCES

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March 11. Granted credit to Village Crafts for merchandise returned, $58.50, plus sales tax, $3.51, from S160; total, $62.01. Credit Memorandum No. 41.

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1. Write the date. 6. Write the sales tax amount.

2. Write Sales Returns and Allowances. 7. Write the accounts to be credited.

3. Write CM and the credit memorandum number.

8. Draw a diagonal line in the Post. Ref. column.

4. Write the amount of the sales return. 9. Write the total accounts receivable amount.5. Write Sales Tax Payable.