LESSON 10-1 Journalizing Sales on Account Using a Sales Journal.

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LESSON 10-1Journalizing Sales

on Account Using a Sales

Journal

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New Vocabulary• Customer: A person or business

to whom merchandise or services are sold.

• Sales Tax: A tax on the sale of merchandise or services.

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SALES TAX page 270

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SALES OF MERCHANDISE ON ACCOUNT

page 271

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VocabularySales Journal: A special journal

used to record only sales of merchandise on account.

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SALES INVOICE page 272

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SALE ON ACCOUNT 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.

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TOTALING, PROVING, AND RULING A SALES JOURNAL

page 274

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Audit Your Understanding

How are sales tax rates usually stated?

• As a percentage of sales

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Why is sales tax collected considered a liability?

• The amount of sales tax collected is a business liability until paid to the government.

What is the title of the general ledger account used to summarize the total amount due from all charge customers?

• Accounts Receivable

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Work Together & OYO

•P. 275

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LESSON 10-2Journalizing Cash

Receipts Using a Cash Receipts Journal

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New Vocabulary• Cash sale: A sale of which cash is received for the

total amount the sale at the time of the transaction (Includes credit card sales)

• Credit card sale: A sale in which a credit card is used for the total amount of the sale at the time at the transaction

• Point-of-sale terminal: A computer used to collect, store, and report all the information of sales transaction

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PROCESSING CASH SALES TRANSACTIONS

page 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)

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New Vocabulary

• Terminal Summary: A report that summarizes the cash and credit card sales of a point-of-sale terminal

Terminal SummaryTerminal Summary

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New Vocabulary

• Batch report: a report of credit card sales produced by a point-of-sale terminal

• Batching out: The process of preparing a batch report of credit card sales from a point-of-sale terminal

Batch ReportBatch Report

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New Vocabulary

• Cash Receipts Journal: A special journal used to record only cash receipt transactions

• Sales discount: the cash discount on sales taken by a customer when paying early

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CASH AND CREDIT CARD SALES page 279

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

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CASH RECEIPTS ON ACCOUNT page 280

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

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CASH RECEIPT ON ACCOUNT --with a 2% sales discountpage 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.

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TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL

page 283

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Who transfers files between the banks involved in the credit card sales?

• The funds are transferred among the banks issuing the credit cards.

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Worked Together & OYO

• P. 284

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LESSON 10-3Recording

Transactions Using a General Journal

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New Vocabulary• Sales return: Credit allowed a customer for the sales price

of returned merchandise, resulting in a decrease in the vendor’s accounts receivable

• Sales allowance: Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor’s accounts receivable

• Credit memorandum: A form prepared by the vendor showing the amount deducted for returns and allowances

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CREDIT MEMORANDUM FOR SALES RETURNS AND ALLOWANCES

page 285

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JOURNALIZING SALES RETURNS AND ALLOWANCES

page 286

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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Audit Your UnderstandingWhat is the difference between a sales return and a

sales allowance?

• A sales return is credit allowed a customer for the sales price of returned merchandise;

• A sales allowance is credit allowed a customer for part of the sales price of merchandise that is not returned.

What is a source document for journalizing sales returns and allowances?

• Credit memorandum

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Work Together & OYO

• P. 287

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Enjoy the Show…

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Preschooler Test.............

I already knew I was dumber than the fifth graders...but now it's the preschoolers.

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• Which way is the bus below traveling?To the left or to the right?

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• Can't make up your mind?

• Look carefully at the picture again.

• Still don't know?

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0011 0010 1010 1101 0001 0100 1011• Pre-schoolers all over the United States

were shown this picture and asked the same question.

• 90% of the pre-schoolers gave this answer:

• "The bus is traveling to the left.."

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• When asked, "Why do you think the bus is traveling to the left?“They answered:

• "Because you can't see the door to get on the bus.“

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The End

LESSON 10-1 Journalizing Sales on Account Using a Sales Journal.

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