CHAPTER THIRTEEN SPECIAL JOURNALS SPECIAL JOURNALS Designed for

CHAPTER THIRTEEN SPECIAL JOURNALS

SPECIAL JOURNALS Designed for recording only certain kinds of transactions Save time journalizing and posting transactions: éTransactions entered on a single line. éColumn totals are posted periodically. General Journal still needed for some transactions.

SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Only sales “on account, ” not cash sales.

SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Cash receipts Any transaction in which cash is received. Cash Sales are recorded in this journal.

SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Purchases Journal Cash receipts Purchases on account “ON ACCOUNT” purchases of MERCHANDISE only

SPECIAL JOURNALS SPECIAL JOURNAL TRANSACTIONS Sales Journal Sales on account Cash Receipts Journal Purchases Journal Cash Payments Journal Cash receipts Purchases on account Cash payments Any transaction in which cash is paid.

SALES TRANSACTIONS • April 4 Made sale no. 133 C on account to Enrico Lorenzo, $1, 520 plus $76 sales tax • April 10 Made salereview no. 134 C Let’s the on account to Brenda Myers, $40 plus $22 sales tax General Journal entries • April 18 Made sale for no. these 105 D on account to Edith transactions. Walton, $980 plus $49 sales tax • April 21 Made sale no. 202 B on account to Susan Chang, $620 plus $31 sales tax • April 24 Made sale no. 162 A on account to Heidi Schwitzer, $1, 600 plus $80 sales tax

GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR DEBIT CREDIT 1, 596 00 Sales Tax Payable sale no. 133 C 5 6 7 8 9 10 11 4 lines are used to prepare one journal entry!! 1, 520 00 76 00

GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR DEBIT CREDIT 1, 596 00 1, 520 00 Sales 76 00 Sales Tax Payable sale no. 133 C 5 6 10 Accts. Receivable/B. Myers 7 Sales 8 9 Sales Tax Payable sale no. 134 C 10 11 462 00 440 00 22 00

GENERAL JOURNAL continued DATE 12 13 14 DESCRIPTION 18 Accts. Receivable/E. Walton 980 00 Sales Tax Payable 15 16 sale no. 105 D 17 21 Accts. Receivable/S. Chang 18 Sales 19 Sales Tax Payable sale no. 202 B 20 21 22 PR DEBIT CREDIT 1, 029 00 49 00 651 00 620 00 31 00

GENERAL JOURNAL continued DATE 23 24 25 26 27 28 29 30 31 32 33 DESCRIPTION PR DEBIT CREDIT 24 Accts. Receivable/H. Schwitzer 1, 680 00 1, 600 00 Sales Tax Payable sale no. 162 AAll the entries involved the same accounts!! 80 00

SALES JOURNAL A column for each account involved in “Sales on account” transactions: éAccounts Receivable (Debit), Sales (Credit), Sales Tax Payable (Credit) Four steps for entering a transaction: éStep #1 Enter Date. éStep #2 Enter Sales number. éStep #3 Enter Customer. éStep #4 Enter Dollar amount.

SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 -Apr 4 133 C Enrico Lorenzo 1, 596 2 3 4 The whole transaction is 5 6 7 8 9 10 11 Page 6 Sales Tax Credit Pay. Credit 1, 520 recorded on ONE line. Account names are not entered. 76

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 24 162 A Heidi Schwitzer PR Accts. Rec. Debit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 6 7 8 9 10 11 Page 6 Sales Tax Credit Pay. Credit Now let’s look at posting from the Sales Journal. 1, 600 31 80

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 24 162 A Heidi Schwitzer PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 5, 160 258 7 8 9 10 11 Step #1 a Total the amount columns.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 24 162 A Heidi Schwitzer PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 5, 160 258 7 8 9 10 11 Step #1 b Verify that the total of the debit column equals the total of the credit columns.

SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 24 162 A Heidi Schwitzer 6 Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 5, 160 258 7 8 9 10 11 Debits $5, 418 Credits $5, 418

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 24 162 A Heidi Schwitzer PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 5, 160 258 7 8 9 10 11 Step #1 c Rule the columns.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 24 162 A Heidi Schwitzer PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 5, 160 258 7 8 9 10 11 Let’s post the Accounts Receivable total.

FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM 20 -Apr. 1 Balance PR DR. 30 Step #2 Enter the date. 12, 000

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 5, 418 Step #3 Enter the amount.

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 5, 418 Step #4 Enter the new balance. 17, 418

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 S 6 5, 418 17, 418 Step #5 Enter “S” for Sales Journal and the journal page number.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer Step #6 Enter the account number below the column total.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) Steps #2 - #6 will be repeated for the Sales and Sales Tax Payable columns. (231)

SALES JOURNAL Date Sale No. To Whom Sold PR Page 1 Accts. Receivable Debit/Sales Credit 1 2 3 4 5 6 7 8 9 10 11 A company that does not charge sales tax, such as a wholesaler, will use a single column Sales Journal.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) Each transaction must also be posted to the Accounts Receivable ledger. (231)

Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 DATE 20 -Apr. 4 ITEM PR DEBIT S 6 CREDIT 1, 596 Step #1 Enter the date. Step #2 Enter the amount. Step #3 Update the balance. Step #4 Enter “S” (Sales Journal) and “ 6” (page number) in the PR column. BALANCE 1, 596

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) “ ” is entered to indicate the transaction has been posted to the Accounts Receivable ledger. (231)

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) The other sales are posted to the Accounts Receivable ledger in the same manner. (231)

CASH RECEIPTS JOURNAL Used to record only cash receipt transactions Includes separate columns for: éCash (Debit) éBank Credit Card Expense (Debit) éAccounts Receivable (Credit) éSales Tax Payable (Credit) éGeneral (Credit)

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 11 EXAMPLE: April 14, received cash on account from Enrico Lorenzo for sale no. 133 C, $1, 596. Page 7 Accts. Rec. Credit

CASH RECEIPTS JOURNAL Date Account Credited PR 1 20 -Apr 14 2 3 4 5 6 7 8 9 10 11 Step #1 Enter date. General Credit Page 7 Accts. Rec. Credit

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 4 5 6 7 8 9 10 11 Step #2 Enter name of account credited.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 This column is used for two purposes: 4 5 6 7 8 9 10 11 1. To identify the customer name for any collection on account. This column is used whenever the Accounts Receivable Credit column is used. 2. To enter the appropriate account name whenever the General Credit column is used.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 4 5 6 7 8 9 10 11 Step #3 Enter the dollar amounts. Page 7 Accts. Rec. Credit 1, 596

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 1, 596 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 4 5 6 7 8 9 10 11 Cash was also received on account on April 20 th and 28 th. Page 7 Accts. Rec. Credit 1, 596 462

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 5 6 7 8 9 10 11 PR General Credit Page 7 Accts. Rec. Credit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 5 6 7 8 9 10 11 Now let’s journalize cash sales for April 30 th of $3, 600 plus tax of $180. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 6 7 8 9 10 11 This column is left blank for cash sales. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 180 5 6 7 8 9 10 11 Page 7 Cash Debit 3, 600 180 = 3, 780 Total Credits = Total Debits

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 7 8 9 10 11 Bank credit card sales are similar to cash sales, no entry is made in the “Account Credited” column. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 180 2, 500 6 7 8 9 10 11 Page 7 Cash Debit Bank Credit Card Sales of $2, 500 were made this month.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 2, 500 180 125 6 7 8 9 10 11 Page 7 Cash Debit Sales Tax on these sales was $125.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 2, 500 180 125 100 6 7 8 9 10 11 Page 7 Cash Debit The service charge on these bank credit card sales was $100.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 2, 500 180 125 100 6 7 8 9 10 11 Page 7 Cash Debit The cash received was $2, 525 [($2, 500 sales + $125 tax) - $100 service chg].

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 7 8 9 10 11 Example: April 30, received cash for rent revenue $600. Page 7 Accts. Rec. Credit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 PR General Credit Page 7 Accts. Rec. Credit 1, 596 462 1, 029 30 6 7 8 9 10 11 We need to credit Rent Revenue and debit Cash.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 30 1, 596 462 1, 029 600 7 8 9 10 11 Since there is no column for Rent Revenue, we must use the “General Credit” column.

CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 30 Rent Revenue 1, 596 462 1, 029 600 7 8 9 10 11 When the “General Credit” column is used, the “Account Credited” column must identify the specific General Ledger account affected.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 7 8 9 10 11 1, 596 462 1, 029 3, 780 2, 500 600 Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 3, 600 5 6 Sales Credit Page 7 Cash Debit 180 125 100 600

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit Borrowing money would be recorded in a similar manner.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 2, 500 180 125 100 6 600 7 3, 000 8 9 10 11

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit On a daily basis, the amounts in the “General Credit” column are posted.

FOUR-COLUMN ACCOUNT Account: RENT REVENUE DATE ITEM 20 -Apr. 1 Balance 30 PR DR. Account No. 412 BALANCE CR. DR. CR. 1, 800 CR 7 600 “CR” for Cash Receipts Journal. 2, 400

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 30 Rent Revenue 7 30 Notes Payable 8 9 10 11 Page 7 Accts. Rec. Credit 1, 596 462 1, 029 412 600 3, 000 General Ledger account number

CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Notes Payable is posted in the same manner.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit 3, 600 3, 087 At the end of the month, the columns are totaled.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 100 Next, we verify that the debit columns equal the total of the credit columns. 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 $3, 600 + $3, 087 + $6, 100 + $305 = $13, 092 Credits 3, 087 6, 100 305 100 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 $100 + $12, 992 = $13, 092 Debits DEBITS = CREDITS!!! 100 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 100 Each column total (except General) is posted at the end of the month. 12, 992

FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM 20 -Apr. 1 Balance PR DR. 12, 000 30 S 6 30 CR 7 5, 418 17, 418 3, 087 14, 331 “CR” for Cash Receipts Journal

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 (122) 6, 100 305 100 12, 992 Account Number indicates total was posted.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 (122) 6, 100 (401) 305 (231) 100 12, 992 (513) (101) Remaining columns are posted in the same manner.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 3, 087 (122) 10 11 6, 100 (401) 305 (231) 100 12, 992 (513) (101) “ ” indicates the column total is not posted.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 3, 600 Postings to the subsidiary Accounts Receivable ledger are made daily. 3, 087

Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 DATE 20 -Apr. 4 14 ITEM PR DEBIT S 6 CR 7 CREDIT 1, 596 BALANCE 1, 596

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 PR General Credit 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit 3, 600 “ ” indicates transaction was posted to the Accounts Receivable subsidiary ledger. 3, 087

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 PR General Credit 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit 3, 600 The payments by Brenda and Edith are posted in the same manner. 3, 087

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 PR General Credit 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit 1, 596 462 1, 029 3, 600 “ ” is entered into the PR column for cash sales and bank credit card sales. 3, 087

PURCHASES JOURNAL Purchases of MERCHANDISE for resale Only ON ACCOUNT éCash purchases would be recorded in the Cash Payments Journal. Single column format éPurchases Debit/Accounts Payable Credit, OR Three column éPurchases Debit, Freight-In Debit, Accounts Payable Credit

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 2 3 4 5 6 7 8 9 10 11 For our example, we will use a single column Purchases Journal.

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 -3, 300 Apr 4 631 Compucraft, Inc. 2 3 4 5 6 7 8 9 10 11 Example: On April 4 th, purchased merchandise from Compucraft, Inc. $3, 300 Invoice no. 631, dated April 2, n/30.

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 -3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 6 7 8 9 10 11 All purchases transactions are journalized in the same manner. 5, 300

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 -3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 6 7 8 9 10 11 5, 300 20, 600 At the end of the month, the column is totaled, ruled, and posted to the General Ledger accounts.

FOUR-COLUMN ACCOUNT Account: PURCHASES DATE ITEM 20 -Apr. 1 Balance 30 PR DR. Account No. 501 BALANCE CR. DR. CR. P 8 20, 600 “P” for Purchases Journal 17, 400 38, 000

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 -3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 6 20, 600 7 8 9 10 11 5, 300 (501) Account Number indicates column total has been posted.

FOUR-COLUMN ACCOUNT Account: ACCOUNTS PAYABLE DATE ITEM 20 -Apr. 1 Balance 30 PR DR. Account No. 202 BALANCE CR. DR. CR. 4, 800 P 8 20, 600 25, 400

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 -3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5, 300 6 20, 600 7 (501) (202) 8 9 10 11 Transactions are posted to the Accounts Payable ledger on a daily basis.

Name: ACCOUNTS PAYABLE LEDGER Compucraft, Inc. Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 DATE 20 -Apr. 4 ITEM PR DEBIT P 8 CREDIT 3, 300 BALANCE 3, 300

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 - 3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5, 300 6 20, 600 7 (501) (202) 8 9 10 11 “ ” is placed in the PR column when posting is completed.

PURCHASES JOURNAL Page 8 Purchases Debit/ Date Invoice From Whom Purchased PR Accounts Payable Credit No. 1 20 - 3, 300 Apr 4 631 Compucraft, Inc. 2 2, 500 8 927 D Datasoft 3 8, 700 11 804 EZX Corp. 4 17 611 Printpro Corp. 800 5 23 1465 Televax, Inc. 5, 300 6 20, 600 7 (501) (202) 8 9 10 11 The remaining transactions are posted in the same manner.

CASH PAYMENTS JOURNAL Used to record only cash payments transactions Every transaction in the journal will involve a credit to the Cash account. Columns are set up in the journal for the most commonly affected accounts in cash payments transactions.

CASH PAYMENTS JOURNAL Date Check No. Account Debited PR Page 12 General Debit 1 2 3 4 5 6 7 8 9 10 11 Example: Payment of rent, $2, 400 on April 2

CASH PAYMENTS JOURNAL Date Check No. Account Debited PR 1 20 -Apr. 2 307 2 3 4 5 6 7 8 9 10 11 All cash payments (except those from Petty Cash) should be made by check for good internal control. Page 12 General Debit

CASH PAYMENTS JOURNAL Date Check No. 1 20 -Apr. 2 307 2 3 4 5 6 7 8 9 10 11 Account Debited PR Rent Expense This column is used for two purposes: 1. To identify a supplier name for any payment on account 2. To enter the appropriate account name whenever the “General Debit” column is used Page 12 General Debit 2, 400

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 2, 400 Accts. Pay. Debit Purchases Debit Purch. Disc. Credit Page 12 Cash Credit 2, 400

CASH PAYMENTS JOURNAL Date Check No. 1 20 -Apr. 2 307 2 4 308 3 4 5 6 7 8 9 10 11 Account Debited Rent Expense PR Page 12 General Debit 2, 400 Example: On April 4 $1, 400 of merchandise was purchased for cash.

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 Accts. Pay. Debit Purchases Debit 2, 400 Purch. Disc. Credit Page 12 Cash Credit 2, 400 1, 400

CASH PAYMENTS JOURNAL Date Check No. 1 20 -Apr. 2 307 2 4 308 3 10 309 4 Account Debited PR Rent Expense B. B. Small 5 6 7 8 9 10 11 Example: On April 10 payment was made on account, $4, 800. Page 12 General Debit 2, 400

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 Accts. Pay. Debit Purchases Debit 2, 400 Purch. Disc. Credit Page 12 Cash Credit 2, 400 1, 400 4, 800

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. Account Debited 307 Rent Expense 308 309 310 B. B. Small PR Notes Payable 5 6 7 8 9 10 11 Example: On April 14 payment was made on a note payable, $2, 000. Page 12 General Debit 2, 400 2, 000

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 Accts. Pay. Debit Purchases Debit 2, 400 1, 400 4, 800 2, 000 Purch. Disc. Credit Page 12 Cash Credit 1, 400 4, 800 2, 000

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 5 Check No. 307 308 309 310 22 311 Account Debited PR Rent Expense 8 9 10 11 2, 400 B. B. Small Notes Payable Gary L. Fishel, Drawing 6 7 Page 12 General Debit Example: On April 22 owner withdrew cash for personal use, $1, 600. 2, 000 1, 600

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 Accts. Pay. Debit Purchases Debit 2, 400 1, 400 4, 800 2, 000 1, 600 Purch. Disc. Credit Page 12 Cash Credit 1, 400 4, 800 2, 000 1, 600

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited PR Rent Expense 10 11 2, 400 B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. 7 8 9 Page 12 General Debit Example: On April 24 made payment on account within the discount period. 2, 000 1, 600

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 6 7 8 9 10 11 Accts. Pay. Debit Purchases Debit Purch. Disc. Credit 2, 400 Page 12 Cash Credit 2, 400 1, 400 4, 800 2, 000 1, 600 8, 700 87 8, 613

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited PR Rent Expense 10 11 2, 400 B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. 7 8 9 Page 12 General Debit On a daily basis, the amounts in the “General Debit” column are posted. 2, 000 1, 600

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 7 8 9 10 11 Account Debited Rent Expense PR Page 12 General Debit 521 2, 400 201 312 2, 000 1, 600 B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. “CP” for Cash Payments journal is entered in the ledger account’s PR column, and the account number is entered in the journal’s PR column.

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited Rent Expense PR Page 12 General Debit 521 2, 400 201 312 2, 000 1, 600 B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. 7 8 9 10 11 6, 000 At the end of the month, the columns are totaled, equality of debits and credits is verified, and totals are posted to the General Ledger.

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 8 9 10 11 Purchases Debit Purch. Disc. Credit 2, 400 1, 400 4, 800 2, 000 1, 600 6 7 Accts. Pay. Debit 2, 000 1, 600 8, 700 6, 000 Page 12 Cash Credit 13, 500 6, 000 13, 500 = 20, 900 1, 400 87 8, 613 87 20, 813 87 20, 813 = 20, 900

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 Purchases Debit Purch. Disc. Credit 2, 400 1, 400 4, 800 2, 000 1, 600 6 2, 000 1, 600 8, 700 7 6, 000 8 9 10 11 Accts. Pay. Debit Page 12 Cash Credit 13, 500 1, 400 87 8, 613 87 20, 813 “ ” indicates the column should not be posted.

CASH PAYMENTS JOURNAL General Debit 1 2 3 4 5 Accts. Pay. Debit Purchases Debit 2, 400 1, 400 4, 800 2, 000 1, 600 6 2, 000 1, 600 8, 700 7 6, 000 13, 500 1, 400 8 9 (202) (501) 10 11 Purch. Disc. Credit Page 12 Cash Credit Account numbers indicate the total were posted. 87 8, 613 87 20, 813 (501. 2) (101)

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited Rent Expense PR Page 12 General Debit 521 2, 400 201 312 2, 000 1, 600 B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. 7 8 9 10 11 6, 000 Transactions affecting the Accounts Payable ledger are posted daily.

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited Rent Expense B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. 7 8 9 10 11 PR Page 12 General Debit 521 2, 400 201 312 2, 000 1, 600 6, 000 “ ” is entered to indicate the transaction has been posted.

CASH PAYMENTS JOURNAL Date 1 20 -Apr. 2 2 4 3 10 4 14 Check No. 307 5 308 309 310 22 311 6 24 312 Account Debited Rent Expense B. B. Small Notes Payable Gary L. Fishel, Drawing EZX Corp. PR Page 12 General Debit 521 2, 400 201 312 7 8 9 10 11 2, 000 1, 600 6, 000 “ ” is also entered for transactions that do not require individual postings.