Chapter 11Journalizing Sales and Cash Receipts

Using Special Journals

Sales TaxCustomer: a person or business to whom merchandise or services is sold

Sales Tax: tax on the sale of merchandise or services

Businesses must file reports regarding sales tax

Sales Tax= Price * Sales Tax %

Total= Price + Sales Tax

11.1 Sales Journal-Merchandise on Account

Realization of Revenue- when revenue is recorded at the time goods or services are sold

Sale on account- aka: charge sale

Sales Journal- Sales of Merchandise on Account only

Sales Invoice

AKA: sales ticket or sales slipSeller- sales invoiceCustomer- purchase invoice

Sale on Account

November 3. Sold merchandise on account to Children’s Paradise, $816.00, plus sales tax, $48.96. Sales invoice #76

Journalize:

Date, Account Name, Sale #

Total Amount-A/R Debit

Sales Credit-Merchandise Amount

Sales Tax Credit-Amount of Tax

Totaling Sales Jounral

At the end of the month- prove, rule, total Sales journal

Debits Columns=Credits Columns

11. 1 REVIEW p. 258

Terms ReviewAudit Your Understanding #1-4Work Together #5-6On Your Own #7-8

11.2 Cash Receipts Journal

Cash Sale- sale where cash is receivedCredit Card Sale- sale using a credit card

Cash Receipts Journal

Cash Receipts Journal- Record only cash receipt transactions (cash or cc)

Cash and Credit CardsNovember 3. Recorded cash and credit card sales, $5,460, plus tax $327.60; total $5787.60. Cash Register Tape #4

To Journalize:

Date, Check Mark (no account name needed), Doc #

Credit Sales and Sales Tax

Debit Cash- Total of Sales and Tax

Cash Receipts on Account

November 6. Received cash on account from Fiesta Costumes, $2,162.40, covering S69. R90.

To Journalize:

Date, Account Title (A/R), Doc #

Credit (A/R- decreasing their balance)

Debit Cash- Increasing Cash

Totaling & Proving

Follow the same procedures as the Cash Payments Journal

Debit Columns= Credit Columns

Double Lines show columns prove and are verified!

Proving Cash

Prove Cash at the end of each month

To Calculate:Cash on hand at start of month

+ Total Cash Received (Cash Debit)

=Total

- Cash Paid (Cash Credit-Cash Payments)

=Cash Balance on Hand at end of Month

This total should prove to checkbook balance on next unused check stub

11.2 REVIEW: p. 264

Terms ReviewAudit Your Understanding #1-3Work Together #4-7On Your Own #8-11

Chapter 11 Review

Application Problems 11.1-11.2Test Wednesday March 2.

THE END