CHAPTER 16 • PLANNING GUIDE SECTION RESOURCES Section College & Career Readiness Professional Development SECTION 16.1 THE SALES JOURNAL Reading Strategy, pp. 453, 455, 456, 460 Critical Thinking, pp. 453, 454, 455, 456, 457, 458, 460 Differentiated Instruction, pp. 457, 458 Math Skill Practice, pp. 455, 459 Writing Support, p. 459 English Language Learners, p. 454 Teacher to Teacher, p. 460 Extended Skill Practice, pp. 454, 455, 456, 457, 459 The sales journal is used to record credit sales of merchandise. SECTION 16.2 THE CASH RECEIPTS JOURNAL Reading Strategy, pp. 462, 463, 466, 468, 471 Critical Thinking, pp. 462, 463, 464, 465, 466, 467, 468, 469, 470, 471 Writing Support, p. 463 Differentiated Instruction, pp. 466, 467, 468 Math Skill Practice, pp. 465, 467 Extended Skill Practice, pp. 464, 467 21 st Century Skills, pp. 469, 480 Common Mistakes, p. 470 Extending the Content, p. 470 Connect to History, p. 471 Case Study, p. 480 Career Wise, p. 481 Spotlight on Personal Finance, p. 481 H.O.T. Audit, p. 481 The cash receipts journal is used to record the cash a business receives. PACING YOUR LESSONS Chapter Introduction Section 1 Section 2 Chapter Assessment 1 period 1 period 2 periods 1 period P *This pacing guide is based on a traditional 36-week course. See pp. TM38–TM39 for complete pacing guide information. 450A Chapter 16
Transcript
CHAPTER 16 • PLANNING GUIDE
SECTION RESOURCESSection College & Career Readiness Professional Development
SECTION 16.1 THE SALES JOURNAL Reading Strategy, pp. 453, 455, 456, 460Critical Thinking, pp. 453, 454, 455, 456, 457, 458, 460Differentiated Instruction, pp. 457, 458Math Skill Practice, pp. 455, 459Writing Support, p. 459
English Language Learners, p. 454Teacher to Teacher, p. 460Extended Skill Practice, pp. 454, 455, 456, 457, 459
The sales journal is used to record credit sales of merchandise.
SECTION 16.2 THE CASH RECEIPTS JOURNAL Reading Strategy, pp. 462, 463, 466, 468, 471Critical Thinking, pp. 462, 463, 464, 465, 466, 467, 468, 469, 470, 471Writing Support, p. 463Differentiated Instruction, pp. 466, 467, 468Math Skill Practice, pp. 465, 467
Extended Skill Practice, pp. 464, 46721st Century Skills, pp. 469, 480Common Mistakes, p. 470Extending the Content, p. 470Connect to History, p. 471 Case Study, p. 480Career Wise, p. 481Spotlight on Personal Finance, p. 481H.O.T. Audit, p. 481
The cash receipts journal is used to record the cash a business receives.
*This pacing guide is based on a traditional 36-week course. See pp. TM38–TM39 for complete pacing guide information.
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STANDARDS AND SKILLS • CHAPTER 16
STANDARDS-BASED LESSON PLANNational Standards for Business Education
StandardsI.C.3 Demonstrate ethical decision-making skills and conduct in a business scenario
I.C.5 Identify and use information technology productively
II.A.3 Identify the sections in an annual report and the purpose of each section
VI.A.2 Identify and apply Identify and apply appropriate information technology to the accounting system
PROFESSIONALDEVELOPMENT
Targeted professional development is correlated throughout Glencoe Accounting. The McGraw-Hill Professional Development Mini Clip Video Library provides teaching strategies to strengthen academic and learning skills. Log on to glencoe.com.
In this Chapter, you will fi nd these Mini Clips:• ELL: Previewing a Text , p. 455• Math: Comparing Similar Figures, p. 458• Reading: Prereading Strategies, p. 462 • Math: Solving Equations, p. 469
*Highlighted blocks indicate areas covered in the chapter. Additional skills are also covered throughout the Teacher Edition.
Resources: Allocating Time Allocating Money Allocating Material and Facility Resources
Allocating Human Resources
Information:Acquiring and
Evaluating Information
Organizing and Maintaining Information
Interpreting and Communicating
Information
Using Computers to Process Information
Interpersonal Skills: Participating as a Member of a Team Teaching Others Serving Clients/
Customers Exercising Leadership Negotiating to Arrive at a Decision
Working With Cultural Diversity
Systems: Understanding Systems
Monitoring and Correcting Performance
Improving and Designing Systems
Technology: Selecting Technology Applying Technology to Task
Maintainingand Troubleshooting
Technology
21st Century Skills Correlations
*See pp. TM33–TM35 for detailed NBEA standards and correlations.
Chapter 16 450B
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CORRELATIONS TO NATIONAL STANDARDS FOR BUSINESS EDUCATION
See p. TM33 for a detailed correlation chart.Standards: I.C.3, I.C.4, I.C.5, II.A.3, VI.A.2
FOCUS
To support JCPenney’s vision for growth, the company updated its Long Range Plan to increase sales and cash receipts. The plan has four business goals: 1) For customers, become America’s favorite retail destination for apparel, accessories, and home fashion. 2) For merchandise, delight customers with merchandise and services. 3) For sales associates, become the preferred choice for a retail career. 4) For performance, establish JCPenney as the growth leader in the industry.
Analyze Possible answer: There are a number of changes that have occurred. Besides the growth of online shopping, home shopping television channels, such as HSN, have become popular retailers. While catalog sales have continued, print catalogs also direct consumers to retail Web sites. Home shopping parties are another way companies sell their products.
FOCUS ON THE PHOTO Visual LiteracyPossible answer: Some sales dollars come from customers who pay cash, while others come from sales on credit. Both types are recorded in the accounting records. Tell students that special journals can simplify the process of recording sales. Ask: What do you already know about sales and cash receipts? Answers will vary, depending on students’ experience. Students may refer to job experiences in retail establishments, restaurants, or other environments where employees use cash registers and handle cash receipts.
T JCP ’ i i f h
REAL-WORLD Business Connection
CHAPTER
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REAL-WORLD Business Connection
FOCUS ON THE PHOTOJCPenney’s ability to follow shopping trends and stay one step ahead has allowed this retail company to connect with consumers and stay profi table. What types of retail sales transactions do you think are recorded in accounting records?
JCPenneyDuring its 100 plus years in the retail industry, JCPenney has adapted to many changes in the way retail companies operate. For a merchandising company, the prime objective is fi nding ways to increase sales and cash receipts. James Cash Penney began his business in 1902 as a single store, and by 1917 had increased to 175 stores over 22 states. By 1941, the company operated 1,600 stores in 48 states. To further augment sales, they began a catalog business in 1963 to reach customers in remote areas. Now, online sales represent much of their total business.
Connect to the BusinessThe ability to adapt to change is what keeps a company like JCPenney in business year after year. Monitoring the way customers live and shop tells a merchandising company what direction to take in what it sells, how it advertises, and how it grows.
AnalyzeWhat changes can you think of that have taken place over the last decade that aff ect the way consumers buy goods and services in the United States?
BIG IDEAUsing special journals instead
of the general journal can save time and reduce errors.
16SPECIAL JOURNALS: SALES AND CASH RECEIPTS
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INTRODUCING CHAPTER 16
To save time and reduce errors, merchandising businesses can use special journals instead of the general journal for several types of transactions.
BIG IDEA
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TEACH Previewing the Main IdeasUse these questions and activities at the beginning of the sections to focus on the Main Ideas.
SECTION 16.1 THE SALES JOURNALAsk: Why do you think a business uses a sales journal? It is designed to handle sale of merchandise on account transactions. Tell students that as the volume of business transactions increases, a sales journal is created to simplify the recording and posting process.
SECTION 16.2 THE CASH RECEIPTS JOURNALAsk: Why do you think a business needs a cash receipts journal? It is designed to handle all cash receipt transactions. Tell students that the cash receipts journal is created to simplify recording and posting of cash receipt transactions.
451
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INTRODUCING CHAPTER 16
The interactive student text and working papers can be found on McGraw-Hill Connect.
Online Learning CenterGet activity and game ideas, reproducible forms, and links to additional accounting resources.
Glencoe Technology Solutions
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Chapter 16 451
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Before You ReadBefore You Read
READING GUIDE STANDARDS
1. CCR stand text
2. CCR stand text
Chapter Objectives
ACADEMIC
English Language ArtsNCTE 12 Use language to accomplish individual purposes. (p. 474)
MathematicsNCTM Number and Operations Understand patterns, relations, and functions. (p. 474)
NCTE National Council of Teachers of EnglishNCTM National Council of Teachers of Mathematics
Concepts
C1 Identify the special journals and explain how they are used in a merchandising business. (p. 453)
C2 Record transactions in sales and cash receipts journals. (p. 454)
Analysis
A1 Post from the sales and cash receipts journals to customer accounts in the accounts receivable subsidiary ledger. (p. 455)
A2 Foot, prove, total, and rule the sales and cash receipts journals. (p. 456)
Procedures
P1 Post column totals from the sales and cash receipts journals to general ledger accounts. (p. 466)
P2 Prepare a schedule of accounts receivable. (p. 470)
Main IdeaThe sales journal is used to record credit sales of merchandise. The cash receipts journal is used to record the cash a business receives.
The Essential Question How do special journals save time and increase accuracy?
CHAPTER 16
Common Core
Speaking and Listening Prepare for and participate effectively in a range of conversations and collaborations with diverse partners, building on others’ ideas and expressing their own clearly and persuasively.
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INTRODUCING CHAPTER 16
FOCUS READING GUIDE
Before You ReadThe Essential Question The essential question encourages students to inquire about the underlying purpose of accounting. Use the essential question as a discussion starter, emphasizing to students that there are no right or wrong answers.
Main IdeaReview with students the defi nition of sale on account from Chapter 14. Then have students read the Main Idea in Before You Read. Ask: What terms are similar to the term credit sales? sales on account, charge sales Ask: What column headings do you think will be listed in the cash receipts journal? Possible answers: Sales Credit, Sales Tax Payable Credit, Accounts Receivable Credit, and Cash in Bank Credit
Chapter Objectives Have students review the objectives to set expectations for what they’ll learn in Chapter 16.
Academic StandardsHelp students see cross-curricular connections whenever possible.
College and Career Readiness standards emphasize skills and concepts students will need beyond high school.
Connect to the Reading Guide Use the following questions to help students connect to the reading.1. What does the chapter title tell you?
Predict2. What do you already know about this
subject from personal experience? Activate Prior Knowledge
3. What have you learned about this in the earlier chapters? Make Connections
4. What gaps exist in your knowledge of this subject? Set a Purpose for Reading
Print• Chapter Study Guides and
Working Papers pp. 431–456• Fast File Chapter 16 ResourcesDigital Transparencies(TeacherWorks Plus)• Section 1: Transparencies 16-1 to
THE SALES JOURNALYou have learned how to record a variety of business transactions in a
general journal. A merchandising business can record all of its transactions in a general journal. However, each transaction requires at least three journal lines—one line for the debit, one line for the credit, and one line for the explanation. Each debit and credit is posted separately to the general ledger. For merchandising businesses with many sales transactions, such as Crate & Barrel, this would be very time consuming. To improve efficiency many merchandising businesses use special journals. In this chapter and the next chapter, you will learn how to record transactions in special journals.
Using Special JournalsWhy Are Special Journals Used?
Special journals have amount columns that are used to record debits and credits to specific general ledger accounts. Most transactions are recorded on one line. Special journals thus simplify the journalizing and posting process. The four most commonly used special journals and the type of transaction recorded in each journal are:
Journal Transaction
Sales journal sale of merchandise on accountCash receipts journal receipt of cashPurchases journal purchase of any asset on accountCash payments journal payment of cash, including payment by check
Businesses that use special journals still need the general journal to record transactions that cannot be entered in the special journals. Let’s first look at the sales journal.
Journalizing and Postingto the Sales JournalHow Do You Use the Sales Journal?
The sales journal is a special journal used to record sales of merchandise on account. Figure 16–1 on page 454 shows a page from the sales journal used by The Starting Line Sports Gear.
Like the general journal, the sales journal has a space for the page number and columns for the date and the posting reference. There is a separate column in which to record the sales slip number and a column in which to record the name of the charge customer. There are also three special amount columns. Figure 16–1 illustrates what is to be recorded in each column.
SECTION 16.1
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• Show Me tutorials • Let Me Try interactive
activities.
Section 16.1 The Sales Journal 453
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R
C
SECTION 16.1
FOCUSBell Ringer • Analyzing: Have students tell
you the accounts affected by sales transactions. Then tell students that they are to design a special journal used only to record sales on account. What column headings would they use?
• Digital Transparency 16-1 focuses students’ attention on the topics covered in Section 16.1.
Bell Ringer
R Reading StrategyActivating Prior Knowledge Refer students to the general journal entry in Chapter 6, p. 139. Ask: How many lines does a typical general journal entry consume? three (one for debit entry, one for credit entry, and one for the source document) OL
C Critical ThinkingMaking Inferences Ask: Why is the general journal not considered a special journal? The general journal is not a special journal but rather an all-purpose journal used for recording transactions that cannot be recorded in a special journal. OL
Content VocabularyTell students that the meaning of the term footing is usually defi ned as “a stable position or placing of one’s feet,” but the accounting defi nition is “a column total written in small penciled fi gures that must be verifi ed.” Ask students to write a brief paragraph, describing how the term’s two defi nitions are related.
Academic VocabularyWhat does impose mean in the following: Most people do not want to impose on their friends by asking to borrow money. compel
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Recording Sales of Merchandise on AccountAre you ready to record a sale on account in the sales journal? It’s
simple. Let’s look at the same transactions you analyzed in Chapter 14 for The Starting Line Sports Gear. This time we will record transactions using the sales journal.
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST.REF.
SALESSLIPNO.
1
2
3
1
2
3
SALES JOURNAL PAGE
Record the amount of the merchandise sold on account
Record the amount of sales tax on the sale
Record the total amount to be received from the customer on account
To record the transaction in the sales journal, journalize from left to right by following these steps.
1. Enter the date of the sales slip in the Date column. 2. Enter the sales slip number in the Sales Slip No. column. 3. Enter the name of the customer in the Customer’s Account Debited
column. 4. Enter the total of the merchandise sold in the Sales Credit column.
(This is the amount shown in the subtotal box of the sales slip.) 5. Enter the amount of the sales tax in the Sales Tax Payable Credit
column. 6. Enter the total amount to be received from the customer in the
Accounts Receiv able Debit column. (This is the amount shown in the total box of the sales slip.)
JOURNAL ENTRY
On December 1 The Starting Line sold merchandise on account to Casey Klein for $200 plus $12 sales tax, Sales Slip 50.
B u s i n e s s Tr a n s a c t i o n
SALES JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST.REF.
SALESSLIPNO.
1
2
3
1
2
3
12
20--Dec. Casey Klein1 50 12 00200 00 212 00
1 2 3 4 5 6
DATE: NO.
SOLDTO
UNITPRICEDESCRIPTION
CASHCLERK CHARGE TERMS
QTY. AMOUNT
SUBTOTAL
SALES TAX
TOTALThank You!
Casey Klein3345 Spring Creek ParkwayPlano, Texas 75094
50December 1, 20--
n/30✓ B.E.
1
6
1
Pair Running Shoes
Pair Athletic Socks
Vinyl Jacket/Pants
$ 100.00
10.00
40.00
00$ 100
60 00
40 00
$ 200 00
12 00
$ 212 00
Figure 16–1 Sales Journal
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C1
C3
C2
SECTION 16.1
TEACHEnglish Language LearnersUnderstanding the vocabulary is critical to success in this course. Students whose primary language is not English might need extra support in order to keep up with the new vocabulary. Always demonstrate new processes and procedures. Provide visuals whenever possible. Keep these posted so that students can access them when necessary.
C1 Critical ThinkingMaking Inferences Tell students to examine Figure 16-1 (Digital Transparency 16-2). Ask: Why do you think the special amount column headings are labeled as such? Because the labeled account titles are the specifi c accounts which are always affected when merchandise is sold on account. OL
C2 Critical ThinkingApplying Procedures Tell students to examine the Business Transaction model (Digital Transparency 16-3). Ask: How many steps are in the recording process? six Ask: How is the entry recorded? from left to right Ask: How can you remember this? English is read from left to right. BL
C3 Critical ThinkingMaking Inferences Ask: In the Business Transaction model, what do the individual amounts in each column indicate? $200—amount of merchandise sold; $12—amount of sales tax charged; $212—total amount to be received from customer OL
Calculating Deductions Accounting often involves calculating total deductions and take-home pay. The Math Review in Chapter 16 Fast File has a reproducible master titled “Applications: Total Deductions and Take-Home Pay.” You can also fi nd this reproducible master on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
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You learned in Chapter 14 that businesses do not impose sales tax on the sale of merchandise to tax-exempt organizations. The next business transaction involves a sale that The Starting Line makes to an organization that has tax-exempt status.
This transaction is analyzed in the same manner as the previous transaction—except there is no sales tax. Journalizing this transaction involves only five steps. The first four steps are the same. There is no sales tax so the fifth step is to enter the total amount to be received from the customer in the Accounts Receivable Debit column.
For sales that do not include a sales tax, amounts entered in the Sales Credit column and in the Accounts Receivable Debit column are the same.
Posting a Sales Journal Entry to theAccounts Receivable Subsidiary Ledger
In Chapter 14 you learned about posting to the accounts receivable subsidiary ledger. To keep the balances of the customer accounts current, sales journal transactions are posted daily to the accounts receivable subsid-iary ledger. Whether you use the general journal or the sales journal when posting to the accounts receivable subsidiary ledger, the process is similar. Refer to Figure 16–2 on page 456 and follow these steps.
1. Enter the date of the transaction in the Date column of the subsidiary ledger account. Use the same date as the journal entry.
2. In the Posting Reference column of the subsidiary ledger account, enter the journal letter and the journal page number. Use the letter S for the sales journal.
3. In the Debit column of the subsidiary ledger account, enter the total amount to be received from the customer.
4. Compute the new balance and enter it in the Balance column. To find the new balance, add the amount in the Debit column to the previous balance amount.
JOURNAL ENTRY
On December 3 The Starting Line sold merchandise on account to South Branch High School Athletics for $1,500, Sales Slip 51.
South Branch High School Athletics1750 Rutgers Dr.Dallas, TX 75207
51December 3, 20--
2/10, n/30✓ B.E.
15
15
15
2
3
Baseball Uniforms
Baseball Caps
Baseball Mitts
Baseballs
Baseball Bats
$ 40.00
20.00
35.00
15.00
15.00
00$ 600
300 00
525 00
30 00
45 00
$ 1,500 00
0 00
$ 1,500 00
Section 16.1 The Sales Journal 455
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M
CR
PROFESSIONALDEVELOPMENT
ELL: Previewing a Text A teacher previews a text, pointing out features and strategies that will promote comprehension.
SECTION 16.1
TEACHM Math Skill PracticeCalculating an Invoice Have students verify the accuracy of Sales Slip 51 by multiplying the quantity by the unit price. Then instruct them to compare the calculation with that on the sales slip, and then add the amount column to verify its total. BL
R Reading StrategyActivating Prior Knowledge Tell students to examine the Business Transaction model (Digital Transparency 16-4). Ask: Why is there no amount in the Sales Tax Payable Credit column? Governmental agencies and school districts are tax-exempt. OL
C Critical ThinkingApplying Procedures Ask: In the Business Transaction model, what procedure should you follow immediately after recording each transaction? Test the equality of debits and credits on that line. (Sales Credit $1,500 � Accounts Receivable Debit $1,500) OL
Recording Transactions in a Sales Journal Use Demonstration Problem 16-1 in Chapter 16 Fast File for step-by-step practice recording transactions in a sales journal. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
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5. Return to the sales journal and enter a check mark (✓) in the Posting Reference column. The check mark indicates that the transaction has been posted to the accounts receivable subsidiary ledger. In manual accounting systems, customer accounts are not numbered, so a check mark is used in the Posting Reference column.
Completing the Sales JournalAll special journals have amount columns used to record debits and
credits to specific general ledger accounts. These amount columns simplify posting. Instead of posting each transaction separately to the general led-ger, only the amount column totals are posted. For the sales journal, the column totals posted are the Sales Credit, the Sales Tax Payable Credit, and the Accounts Receivable Debit. Therefore, only three postings are made to the general ledger from the sales journal.
Footing, Proving, Totaling, and Ruling the Sales Journal
Before posting amounts to the general ledger, cal culate and verify the column totals. Refer to Figure 16–3 for each step.
1. Draw a single rule across the three amount columns, just below the last transaction.
2. Foot the amount columns. A footing is a column total written in small penciled figures. A footing must be verified. It is written in pencil so that it can be erased if a mistake is discovered.
3. On a separate sheet of paper, test for the equality of debits and credits. The total of the debit column should equal the total of the two credit columns.
Debit Column Credit Columns Accounts Receivable $11,305 Sales Tax Payable $ 555 Sales 10,750 Total $11,305 Total $11,305
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST.REF.
SALESSLIPNO.
1
2
3
1
2
3
ADDRESS
NAME
CREDITDEBIT BALANCEDESCRIPTIONDATEPOST.REF.
20--Dec. 1 2 00 2 1 2 002 0 0 00Casey Klein1 ✓50
SALES JOURNAL PAGE 12
20--Dec.
2 1 2 005 0 0 007 1 2 00
Balance11
✓
S12
Casey Klein3345 Spring Creek Parkway, Plano, TX 750941
5
3
4
2
Figure 16–2 Posting a Sales Journal Entry to the Accounts Receivable Subsidiary Ledger
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R1
C
R2
TEACHC Critical Thinking
Applying Procedures Ask students to examine Figure 16-2 (Digital Transparency 16-5). Ask: How do you know to post $212 to Casey Klein’s account? The $212 is in the Accounts Receivable Debit column and Casey Klein is identifi ed in the Customer’s Account Debited column. OL
R1 Reading StrategyReading Accounting Forms Ask: In Figure 16-2, what does the check mark in the Post. Ref. column of the sales journal indicate? that $212 was posted to Casey Klein’s account OL
R2 Reading StrategyReading Accounting Forms Ask: In Figure 16-2, what does S12 in the Post. Ref. column indicate? that $212 was posted from p. 12 of the sales journal OL
SECTION 16.1
Posting to the Accounts Receivable Subsidiary Ledger Use Demonstration Problem 16-2 in Chapter 16 Fast File for step-by-step practice posting to the accounts receivable subsidiary ledger. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
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4. In the Date column, on the line below the single rule, enter the date the journal is being totaled.
5. On the same line, in the Customer’s Account Debited column, enter the word Totals.
6. Enter the column totals, in ink, just below the footings. 7. Double-rule the three amount columns. A double rule, as you know,
indicates that the totals have been verified.
After the sales journal has been footed, proved, totaled, and ruled, the column totals are posted to the general ledger.
Posting the Total of the Sales Credit ColumnRefer to Figure 16–4 on page 458 as you read the procedure for posting
the total of the Sales Credit column to the Sales account in the general ledger.
1. In the Date column of the Sales account in the general ledger, enter the date from the Totals line of the sales journal.
2. Enter the sales journal letter and page number in the Posting Reference column. Remember that S is the letter for the sales journal.
3. In the Credit column, enter the total from the Sales Credit column of the sales journal.
4. Compute the new balance and enter it in the Credit Balance column. To determine the new balance, add the amount entered in the Credit column to the previous balance.
5. Return to the sales journal and enter the Sales account number, in parentheses, below the double rule in the Sales Credit column. The number written in parentheses indicates that the column total has been posted to the general ledger account.
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST.REF.
SALESSLIPNO.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
SALES JOURNAL
20--Dec. 1 2 00
2 1 0 001 8 00
6 001 5 002 4 003 0 006 0 002 1 001 2 00
1 4 7 00
5 5 5 00
2 1 2 001 5 0 0 003 7 1 0 00
3 1 8 001 0 6 002 6 5 004 2 4 005 3 0 00
1 0 6 0 003 7 1 002 1 2 00
2 5 9 7 00
11 3 0 5 00
2 0 0 001 5 0 0 003 5 0 0 00
3 0 0 001 0 0 002 5 0 004 0 0 005 0 0 00
1 0 0 0 003 5 0 002 0 0 00
2 4 5 0 00
10 7 5 0 00
Casey KleinSouth Branch High School AthleticsBreak Point Sports ClubGabriel RamosKim WongRobert GalvinJoe DimaioMegan SullivanTammy’s Fitness ClubAnita MonteroShashi RahimLara YoungTotals
1359
101218202426283031
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
505152535455565758596061
PAGE 12
1 0 7 5 0 0 0 5 5 5 0 0 1 1 3 0 5 0 0
4
1
2
6
75 3
Figure 16–3 Totaled and Ruled Sales Journal
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C1
C2
D
TEACHC1 Critical ThinkingDrawing Conclusions Refer students to Figure 16-3 (Digital Transparency 16-6). Ask: Why are customer accounts debited? The sales journal records sales on account; the amount each customer owes as accounts receivable is increasing. OL
D Diff erentiated Instruction
Visual-Spatial Learning Ask: In Figure 16-3, what indicates that postings have been made to customer accounts? A check mark has been entered in the Post Reference column on the line of each customer’s account. OL
C2 Critical ThinkingMaking Inferences Ask: In accounting what does the term footing mean as explained on page 456? It is the column total written in small penciled fi gures. Ask: How is a footing used? It is used to test column totals for equality of debits and credits. OL
SECTION 16.1
Totaling, Proving, and Ruling the Sales Journal Use Demonstration Problem 16-3 in Chapter 16 Fast File for step-by-step practice totaling, proving, and ruling the sales journal. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
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Students with Hearing Impairments When speaking with students who wear hearing aids, be sure to stand close to them. Hearing aids have a limited range. The hearing
aids also amplify all sound, so try to restrict background noise as much as possible by keeping the classroom quiet or speaking to the student in a quiet offi ce. Speak in a normal tone of voice. Shouting
is not necessary, but speaking clearly is. Try not to let your voice trail off at the ends of sentences. In class, repeat the questions of other students.
Differentiated Instruction
Posting the Total of theSales Tax Payable Credit Column
The next amount to be posted is the Sales Tax Payable Credit column total. Refer to Figure 16–5 as you read the following procedure.
1. In the Date column of the Sales Tax Payable account, enter the date from the Totals line of the sales journal.
2. Enter the sales journal letter and page number in the Posting Reference column.
3. In the Credit column, enter the total from the Sales Tax Payable Credit column of the sales journal.
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST. REF.
SALESSLIPNO.
1
2
1
2
13
14
15
16
13
14
15
16
DEBIT CREDIT
BALANCEDEBIT CREDITDESCRIPTIONDATE
POST. REF.
ACCOUNT NO.ACCOUNT
20--Dec. 1 2 00
1 4 7 00
5 5 5 00
2 1 2 00
2 5 9 7 00
11 3 0 5 00
2 0 0 00
2 4 5 0 00
10 7 5 0 00( 4 0 1 )
Casey Klein1 ✓
✓
50
Lara YoungTotals
3031
61
SALES JOURNAL PAGE 12
20--Dec. 300 0 0 0 00
310 7 5 0 0010 7 5 0 00Balance1
31✓
S12
Sales 40131 2
5
4
1 0 7 5 0 0 0 5 5 5 0 0 1 1 3 0 5 0 0
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST. REF.
SALESSLIPNO.
1
2
1
2
13
14
15
16
13
14
15
16
DEBIT CREDIT
BALANCEDEBIT CREDITDESCRIPTIONDATE
POST. REF.
ACCOUNT NO.ACCOUNT
20--Dec. 1 2 00
1 4 7 00
5 5 5 00( 2 2 0 )
2 1 2 00
2 5 9 7 00
11 3 0 5 00
2 0 0 00
2 4 5 0 00
10 7 5 0 00( 4 0 1 )
Casey Klein1 ✓
✓
50
Lara YoungTotals
3131
61
SALES JOURNAL PAGE 12
20--Dec. 1 3 0 0 00
1 2 9 1 001 8 4 6 00
9 005 5 5 00
Balance14
31
✓
G20S12
Sales Tax Payable 22031 25
4
1 0 7 5 0 0 0 5 5 5 0 0 1 1 3 0 5 0 0
Figure 16–4 Posting the Sales Credit Total to the General Ledger Account
Figure 16–5 Posting the Sales Tax Payable Credit Total to the General Ledger
458 Chapter 16 Special Journals: Sales and Cash Receipts
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C1
C2
C3
PROFESSIONALDEVELOPMENT
Mathematics: Comparing Similar Figures Students work in small groups using manipulatives to create similar fi gures.
TEACHC1 Critical ThinkingMaking Inferences Tell students to examine Figure 16-4 (Digital Transparency 16-7). Ask: How do you know that $10,750 was posted as a credit to Sales? The sales journal number (401) is entered below the column total, and column heading is “Sales Credit.” OL
C2 Critical ThinkingMaking Inferences Ask: In Figure 16-4, why are no account numbers written under the Sales Tax Payable and Accounts Receivable columns? totals have not yet been posted OL
C3 Critical ThinkingDrawing Conclusions Have students examine Figure 16-5 (Digital Transparency 16-8). Ask: What is the effect if $555 is posted as a debit to Sales Tax Payable? Sales Tax Payable account would be understated since this account has a normal credit balance. AL
SECTION 16.1
458 Chapter 16
453_472_C16_SEC_895867.indd 458 11/24/10 5:46 PM
4. Compute the new balance and enter it in the Credit Balance column.
5. Return to the sales journal and enter the Sales Tax Payable account number, in parentheses, below the double rule in the Sales Tax Payable Credit column.
Reading Check Explain How do you know when the column total has been posted to the general ledger?
Posting the Total of the Accounts Receivable Debit Column
The last column of the sales journal to be posted is the Accounts Receivable Debit column. Refer to Figure 16–6 as you read these steps.
1. In the Date column of the Accounts Receivable account, enter the date from the Totals line of the sales journal.
2. Enter the sales journal letter and page number in the Posting Reference column.
3. In the Debit column, enter the total from the Accounts Receivable Debit column of the sales journal.
4. Compute the new balance and enter it in the Debit Balance column. 5. Return to the sales journal and enter the Accounts Receivable
account number, in parentheses, below the double rule in the Accounts Receivable Debit column.
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST. REF.
SALESSLIPNO.
1
2
1
2
13
14
15
16
13
14
15
16
DEBIT CREDIT
BALANCEDEBIT CREDITDESCRIPTIONDATE
POST. REF.
ACCOUNT NO.ACCOUNT
20--Dec. 1 2 00
1 4 7 00
5 5 5 00( 2 2 0 )
2 1 2 00
2 5 9 7 00
11 3 0 5 00( 1 1 5 )
2 0 0 00
2 4 5 0 00
10 7 5 0 00( 4 0 1 )
Casey Klein1 ✓
✓
50
Lara YoungTotals
3031
61
SALES JOURNAL PAGE 12
20--Dec. 6 2 5 9 00
6 1 0 0 0017 4 0 5 0011 3 0 5 00
1 5 9 00Balance1
431
✓
G20S12
Accounts Receivable 1151 2
4
3
5
1 0 7 5 0 0 0 5 5 5 0 0 1 1 3 0 5 0 0
Figure 16–6 Posting Accounts Receivable Debit Total to the General Ledger
Section 16.1 The Sales Journal 459
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C
MW
TEACHW Writing SupportWriting Concisely Refer students to Figure 16-6 (Digital Transparency 16-9). Have students write a paragraph summarizing the sales journal posting process. OL
M Math Skill PracticeCalculating Percentages Ask students to look at Figure 16-6. Ask: Using the Sales Journal totals, what is the sales tax rate percentage? $555/$10,750 � 5.16% AL
C Critical ThinkingMaking Inferences Have students examine Figure 16-6. Ask: What would happen if $11,305 were posted as a credit? Accounts Receivable account would have a credit balance and would be understated since this account has a normal debit balance; accounts receivable subsidiary ledger and the Accounts Receivable controlling account would not agree. AL
Reading CheckThere is an account number in parentheses under the column total.
SECTION 16.1
Posting Sales Journal Totals Use Demonstration Problem 16-4 in Chapter 16 Fast File for step-by-step practice posting sales journal totals. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
Chapter 16 459
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TE RTEACHER
TEACHERTEACHER
TOTO Designing Your Own Business Have students design their own business by planning and producing a business portfolio that includes the business logo, a chart of accounts, and a variety of business transactions that refl ect an active, profi table business. Students will then prepare a fi nal report that analyzes the fi nancial status of the business from all data generated from the fi nancial statements. In this activity students utilize critical thinking, reasoning, logic, communication, and interpersonal skills.
Missy SheaAmherst Regional, High School, Amherst, Massachusetts
C1
R
C2
AACCHH
C1
R
C2
Proving the Sales Journal at the End of a PageAll special journals are totaled and proved at the end of every month.
Sometimes, however, a business has so many transactions in one month that it is impossible to fit them all on one journal page. When this occurs, the journal page is totaled and ruled before a new page is started.
Refer to Figure 16–7 and follow these steps to record the totals and carry them forward to the next page.
1. Draw a single rule across the three amount columns below the last trans action. Foot the columns and prove the equality of debits and credits.
2. On the line following the last transaction, enter the date of the last transaction in the Date column.
3. In the Customer’s Account Debited column, write Carried Forward. 4. Place a check mark (✓) in the Posting Reference column. This check
mark indicates that these totals are not to be posted. 5. Enter the column totals in ink. Do not place a double rule under the
columns. 6. On the next journal page, enter the new page number. 7. On lines 1 and 2, enter the complete date (year, month, and day)
in the Date column. Use the same date as on the last line of the previous page.
8. Place a check mark (✓) in the Sales Slip No. column and write Brought Forward in the Customer’s Account Debited column.
9. Place a check mark (✓) in the Posting Reference column. 10. Enter the column totals from the previous page on line 2.
The journal page is now ready for the recording of the next transaction.
460 Chapter 16 Special Journals: Sales and Cash Receipts
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TEACHR Reading Strategy
Reading Accounting Forms Refer students to Figure 16-7 (Digital Transparency 16-10). Ask: What does the phrase “Carried Forward” indicate? The column totals of page 12 were carried forward to page 13. BL
C1 Critical ThinkingMaking Inferences Refer students to Figure 16-7. Ask: If the column totals on page 12 were not in agreement, and the amounts were carried forward to page 13, what would be the effect of this error? When page 13 is footed and proved, it would be out of balance too. OL
C2 Critical ThinkingDefi ning Terms Ask: How can you remember the difference between “carried forward” and “brought forward”? You “carry” an item to another place—for example, totals from page 12 to page 13. You “brought” those totals from page 12. BL
SECTION 16.1
460 Chapter 16
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SECTION 16.1
ASSESSSECTION 16.1 ASSESSMENT RESOURCES Use these resources to assess mastery of section content.• Chapter Study Guides and Working
Papers (Problems 16-1, 16-2)• Presentation Plus!
glencoe.com
Online Learning Center: Click on Student Center. Click on Self-Assessment Quizzes and select Chapter 16.
SECTION 16.1 ASSESSMENT
Reinforce the Main IdeaSales journal: sale on accountCash receipts journal: receipt of cashPurchases journal: purchase on accountCash payments journal: payment of cash, including payment by check
Math for Accounting1. Oct. 2 $ 45 10 102 17 246 30 228
PROBLEM 16–21. Sales Cr. $820, Sales Tax Payable Cr.
$41, Accounts Receivable Dr. $8612. Ending balance $1,161
CLOSESynthesizing Have students write a memo to their supervisor addressing the need for special journals.
Special Journal Kind of Transaction
After You Read
PROBLEM 16–1 Posting Column Totals from the Sales Journal
INSTRUCTIONS Here are the column totals of the sales journal for the month of April. In your working papers, post these totals to the appropriate general ledger accounts.pp p g g
SALES JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
DEBIT
SALESCREDITCUSTOMER’S ACCOUNT DEBITEDDATE
POST. REF.
SALESSLIPNO.
1
2
1
2
32
33
32
33
4
Totals30
20--Apr. Amy Anderson1 ✓47 48 00
720 00
800 00
12 000 00
848 00
12 720 00
PROBLEM 16–2 Analyzing a Source DocumentMetro Sports Distributors had this transaction that occurred on June 15. INSTRUCTIONS 1. Analyze the sales slip shown. In your
working papers, record the required entry on page 3 of the sales journal.
2. Post to the customer’s account in the accounts receivable subsidiary ledger.
Math for AccountingVijay Products had the following amounts entered in the Sales Credit Column of its October Sales Journal. Oct. 2 $1,500 10 3,400 17 8,200 30 7,600Assume a 3% sales tax was imposed on each sale. Answer the following questions.1. What amount should
be entered in the Sales Tax Payable Credit Column for each sale?
2. What amount should be entered in the Accounts Receivable Debit Column for each sale?
Reinforce the Main IdeaCreate a table similar to this one to identify the four special journals and the kind of transaction recorded in each
SECTION 16.1 • ASSESSMENT
DATE: NO.
SOLDTO
UNITPRICEDESCRIPTION
CASHCLERK CHARGE TERMS
QTY. AMOUNT
SUBTOTAL
SALES TAX
TOTALThank You!
M&M Consultants2816 Mt. Odin DriveWilliamsburg, VA 23185
113June 15, 20--
3/15, n/45RDP
10
2 doz.
20
Golf Bags
Ladies Golf Shirts
Golf Caps
$ 50.00
100.00/doz
6.00
00$ 500
200 00
120 00
$ 820 00
41 00
$ 861 00
Kingston Mall, Williamsburg, Virginia 23185
METR
Section 16.1 The Sales Journal 461
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QUIZ 1. What are special journals? journals used to record debits and credits to specifi c general
ledger accounts2. Why are special journals used? They simplify the journalizing and posting process, especially
when there is a large volume of transactions.3. What is a sales journal? special journal used to record sale of merchandise on account4. What four things must be done at the month-end to complete the sales journal? foot, prove,
total and rule
SEC TION 16.1
Chapter 16 461
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PRETEACHING SECTION VOCABULARY
SECTION VOCABULARY
Content Vocabulary• cash receipts journal
• schedule of accounts receivable
Academic Vocabulary• sum
THE CASH RECEIPTS JOURNALSECTION 16.2
In Chapter 14 you learned that the three most common sources of cash for a merchandising business are payments from charge customers, cash sales, and bankcard sales. These businesses also receive cash, but less frequently, from the sale of other business assets.
Can you imagine how many checks local cable television, electric, and telephone companies receive daily? They must have a streamlined cash receipts process to record checks efficiently. In this section you will learn to use a cash receipts journal as an efficient way to record cash receipts.
Journalizing and Posting to the Cash Receipts JournalHow Do You Use the Cash Receipts Journal?
The cash receipts journal is a special journal used to record all cash receipt transactions. It always has a Cash in Bank Debit column since every transaction in it debits the Cash in Bank account. The number of credit columns varies, depending on the company’s needs. The Starting Line's cash receipts journal in Figure 16–8 has six amount columns plus the date, source document, account name, and posting reference columns.
To keep the customer account balances current, the entries in the Accounts Receivable Credit column are posted daily to the accounts
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
1
2
3
1
2
3
13
Record credits to accounts for whichthere is no special column
Record amount of merchandise purchasedby customers using cash or bankcards
Record amount of sales tax collected on cash or bankcard sales
Record payments from charge customers here
Record the amount of cash discounts taken by charge customers
Record the amount of cash actually received in the transaction
Figure 16–8 Cash Receipts Journal
glencoe.com
• Show Me tutorials • Let Me Try interactive
activities.
462 Chapter 16 Special Journals: Sales and Cash Receipts
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C
R
PROFESSIONALDEVELOPMENT
Reading: Prereading Strategies A teacher assesses students’ prior knowledge about a text selection.
SECTION 16.2
FOCUSBell Ringer • Role-Playing: Ask for volunteers to
role-play a cash sale. Have students observe the role-play and write notes about the transaction. Ask them to identify the accounts affected by the sales transaction. Then record the entry in a cash receipts journal.
• Digital Transparency 16-11 focuses students’ attention on the topics covered in Section 16.2.
Bell Ringer
R Reading StrategyActivating Prior Knowledge Ask: What are the most common sources of cash receipts for a merchandising business? cash sales, bankcard sales, payments on account OL
C Critical ThinkingMaking Inferences Have students examine Figure 16-8 (Digital Transparency 16-12). Ask: What does the column heading “General Credit” mean to you? Amounts recorded here will be credited to a general ledger account which does not have its own column. AL
Content Vocabulary Have students examine Figure 16-13 (p. 471) to observe how the cash receipts journal and schedule of accounts receivable are related. Ask students to identify the entry that should be the same for both records.
Academic Vocabulary Have students rewrite the following sentence using an Academic Vocabulary word instead of the underlined phrase: The fi nal bill refl ects the total of all charges for transporting the football team to away games this season. sum
462 Chapter 16
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SECTION 16.2
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
1
2
3
1
2
3
212 00212 0020--Dec. 5 R301 Casey Klein
13
1 2 3 4 5
receivable subsidiary ledger. The entries in the General Credit column are also posted daily to the individual general ledger accounts. At month-end all special amount column totals are posted to the general ledger accounts named in the column headings.
Recording Cash from Charge CustomersFollow these steps when journalizing cash receipts from charge customers.
The source document for this transaction is the receipt.
1. Enter the date of the transaction in the Date column. 2. Enter the receipt number in the Document Number column. Write
the letter R (for receipt) before the receipt number. 3. Enter the name of the customer in the Account Name column. 4. Enter the decrease in the amount owed by the customer in the
Accounts Receivable Credit column. 5. Enter the amount of cash received in the Cash in Bank Debit column.
When this entry has been posted to the customer’s account in the accounts receivable subsidiary ledger, enter a check mark (✓) in the Posting Reference column of the cash receipts journal.
Recording Cash Received on Account, Less a Cash Discount
Let’s use these steps to record a cash receipt transaction (shown on page 464) with a cash discount.
1. Enter the date of the receipt in the Date column. 2. Enter the receipt number in the Document Number column.
Remember to write the letter R before the receipt number. 3. Enter the name of the customer in the Account Name column. 4. In the Accounts Receivable Credit column, enter the amount of the
original sales transaction (the amount that was debited in the sales journal) less any related sales returns or allowances.
5. Enter the cash discount amount in the Sales Discounts Debit column. 6. Enter the amount of cash received in the Cash in Bank Debit column.
On December 5 The Starting Line received $212 from Casey Klein to apply on account, Receipt 301.
B u s i n e s s Tr a n s a c t i o n
JOURNAL ENTRY
RECEIVED FROM $
DOLLARS
FOR
RECEIPT
RECEIVED BY
20 --
Casey Klein 212.00
Two hundred twelve and no/100
On account
Michael Smith
Dec. 5
No. 301
Section 16.2 The Cash Receipts Journal 463
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CR
W
TEACHW Writing SupportWriting Clearly Refer students to the steps in Recording Cash from Charge Customers. Have students write a memo explaining the use of the Doc. No. column and the Post. Ref. column in the cash receipts journal. AL
R Reading StrategyReading Accounting Forms Ask: In the Business Transaction model (Digital Transparency 16-13), what is the direction of the sequence of steps for recording the entry? from left to right OL
C Critical ThinkingComparing Ask: In the Business Transaction model, how many lines did the receipt of cash transaction use? one Ask: How many lines would be taken up if the entry had been recorded in the general journal? three OL
Chapter 16 463
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Recording Cash SalesThe Starting Line records cash sales every two weeks, but many businesses
journalize cash sales and deposit cash daily. Follow these steps to enter cash sales in the cash receipts journal. The source document is the cash register tape.
1. Enter the date written on the cash register tape in the Date column. 2. Enter the number of the tape in the Document Number column.
Write the letter T (for tape) before the tape number. 3. Enter the words Cash Sales in the Account Name column. 4. Enter a dash in the Posting Reference column to indicate that no
entry has been posted individually to the general ledger accounts. Cash sales amounts are posted to the general ledger as part of the column totals at month-end.
5. Enter the amount of merchandise sold in the Sales Credit column. 6. Enter the amount of the sales taxes collected in the Sales Tax
Payable Credit column. 7. Enter the total cash received in the Cash in Bank Debit column.
JOURNAL ENTRY
On December 12 The Starting Line received $1,470 from South Branch High School Athletics in payment of Sales Slip 51 for $1,500 less the discount of $30, Receipt 302.
On December 15 The Starting Line records the cash sales for the first two weeks of December, $3,000, and $180 in related sales taxes, Tape 55.
B u s i n e s s Tr a n s a c t i o n
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
4
5
4
5
3 180 00180 003 000 0015 —T55 Cash Sales
13
1 2 3 54 76
3000.00 CA180.00 ST
Dec. 15Tape 55
464 Chapter 16 Special Journals: Sales and Cash Receipts
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C1
C2
C3
PROFESSIONALDEVELOPMENT
Reading: Connecting the Pieces A teacher helps students develop predictions and inferences.
SECTION 16.2
TEACHC1 Critical ThinkingApplying Procedures Refer students to the Business Transaction model at the top of the page (Digital Transparency 16-14). Ask: What proof should be made immediately after recording a transaction in the cash receipts journal? Check the entry for equality of debits and credits. OL
C2 Critical ThinkingMaking Inferences Ask students to examine the Business Transaction model at the bottom of the page (Digital Transparency 16-15). Ask: Why do you think a dash is entered in the Post. Ref. column? to indicate that the amounts entered are not posted individually to the general ledger accounts OL
C3 Critical ThinkingMaking Inferences Ask: In the Business Transaction model at the bottom of the page, why is “Cash Sales” written in the Account Name column? to identify the type of entry OL
Recording Transactions in a Cash Receipts Journal Use Demonstration Problem 16-6 in Chapter 16 Fast File for step-by-step practice recording transactions in a cash receipts journal. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
464 Chapter 16
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SECTION 16.2Recording Bankcard Sales
A business can record and deposit bankcard sales slips at any interval. The Starting Line processes them every two weeks. Follow these steps to enter bankcard sales in the cash receipts journal. Note the similarity to recording a cash sale. The entry’s source document is the cash register tape.
1. Enter the date of the cash register tape in the Date column. 2. Enter the number of the tape in the Document Number column.
Remember to write the letter T before the tape number. 3. Enter the words Bankcard Sales in the Account Name column. 4. Enter a dash in the Posting Reference column. The amounts
recorded in the bankcard sales entry will be posted to the general ledger as part of the column totals at the end of the month.
5. Enter the amount of merchandise sold in the Sales Credit column. 6. Enter the sales taxes collected in the Sales Tax Payable Credit
column. 7. Enter the total cash received in the Cash in Bank Debit column.
JOURNAL ENTRY
On December 15 The Starting Line recorded bankcard sales of $700 for the first two weeks of December and related sales taxes of $42, Tape 55.
B u s i n e s s Tr a n s a c t i o n
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
5
6
5
6
742 0042 00700 0015 —T55 Bankcard Sales
13
1 2 3 54 76
Recording Other Cash ReceiptsOccasionally, a retail business receives cash from a transaction (shown
on page 466) that does not involve the sale of merchandise. Since the business is receiving cash, it enters the transaction in the cash receipts journal. These are the steps to enter the next business transaction in the cash receipts journal:
1. Enter the date of the receipt in the Date column. 2. Enter an R and the receipt number in the Document Number
column. 3. Enter Office Equipment in the Account Name column. 4. Enter the amount of the credit in the General Credit column. Use
the General Credit column when the credit part of the entry is to an account that does not have a special amount column.
5. Enter the amount of cash received in the Cash in Bank Debit column.
700.00 BCS42.00 ST
Dec. 15Tape 55
Section 16.2 The Cash Receipts Journal 465
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C1
C2
M
TEACHM Math Skill PracticeCalculating Totals Ask students to look at Tape 55 in the Business Transaction model (Digital Transparency 16-16). Ask: If BCS were $1,893 and the sales tax rate were 8.25%, what would be the amount of sales tax? $156.17 BL
C1 Critical ThinkingComparing-Contrasting Have students compare the Business Transaction model for bankcard sales with the cash sales transaction on page 464. Ask: How are they similar? The entry is recorded in the same way and the source document is the same. Ask: What is different? the account name OL
C2 Critical ThinkingDrawing Conclusions Have students look at the Business Transaction model and assume that $42 was incorrectly entered in the Sales Discounts Debit column instead of the Sales Tax Payable Credit column. Ask: After posting, how does it affect the two accounts? Sales Discounts, overstated; Sales Tax Payable, understated AL
CHAPTER 16 ENRICHMENT RESOURCES
Fast File Chapter 16 Resources• Concept Assessment• Chapter Quiz• Chapter Test
Presentation Plus!PowerPoint® Presentations
glencoe.com
Online Learning Center• Info Trek• Show Me• Let Me Try• Interactive Glossary (English and Spanish)
• Connect to Careers• Extend—A Matter of Ethics• Personal Finance Online• Self-Assessment Section Quizzes• Self-Assessment Chapter Quiz
Chapter 16 465
453_472_C16_SEC_895867.indd 465 11/24/10 8:39 PM
Posting to the Accounts Receivable Subsidiary Ledger
A business posts daily from the Accounts Receivable Credit column to the accounts receivable subsidiary ledger so that customer accounts are always current. To post a cash receipt transaction to an account in the accounts receivable subsidiary ledger, follow these steps. Refer to Figure 16–9.
1. Enter the date of the transaction in the Date column of the subsidiary ledger account.
2. In the subsidiary ledger Posting Reference column, enter the journal letters and the page number. Use CR for the cash receipts journal.
3. In the subsidiary ledger Credit column, enter the amount from the Accounts Receivable Credit column of the cash receipts journal.
4. Compute and enter the new balance in the Balance column. If the account balance is zero, draw a line through the Balance column.
JOURNAL ENTRY
On December 16 The Starting Line received $30 from Mandy Harris, an office employee. She purchased a cal -culator that the business was no longer using, Receipt 303.
B u s i n e s s Tr a n s a c t i o n
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
6
7
6
7
30 00 30 0016 R303 Office Equipment
13
1 2 3 4 5
RECEIVED FROM $
DOLLARS
FOR
RECEIPT
RECEIVED BY
20 --
Mandy Harris 30.00
Thirty and no/100
calculator
Michael Smith
Dec. 16
No. 303
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
1
2
3
1
2
3
ADDRESS
NAME
CREDITDEBIT BALANCEDESCRIPTIONDATEPOST.REF.
212 00212 0020--Dec. 5 ✓R301 Casey Klein
13
20--Dec.
2 1 2 002 1 2 00
5 0 0 007 1 2 005 0 0 00
Balance115
✓
S12CR13
Casey Klein3345 Spring Creek Parkway, Plano, TX 75094
4
5
213
Figure 16–9 Posting from the Cash Receipts Journal to the Accounts Receivable Subsidiary Ledger
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SECTION 16.2
TEACHC1 Critical ThinkingDrawing Conclusions Have students look at the Business Transaction model (Digital Transparency 16-17). Ask: Why is $30 entered in the General Credit column? The General Credit column is used for crediting general ledger accounts that do not have their own column. OL
R Reading StrategyReading Accounting Forms Have students examine Figure 16-9 (Digital Transparency 16-18). Ask: Look at Casey Klein’s account. Where did the $212 debit originate? sales journal p. 12 Ask: Where did the $212 credit originate? cash receipts journal p. 13 OL
C2 Critical ThinkingDrawing Conclusions Have students examine Figure 16-9. Ask: What is the effect of the Accounts Receivable credit on the balance of Casey Klein’s subsidiary ledger account? It decreases it by $212. OL
Interpersonal Learning Changes in technology often require new workplace skills. Have students interview someone whose daily work involves computerized accounting. Among
the questions students should ask are: What computer skills do you use? How did you acquire those skills? How often do you need to upgrade your skills? How do you upgrade your skills? What new
computer and communications hardware makes your work easier? Have volunteers share the information they have obtained with the class.
Universal Access
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SECTION 16.2 5. Return to the cash receipts journal and enter a check mark (✓) in
the Posting Reference column.
Posting the General Credit ColumnA business posts daily from the General Credit column of the cash
receipts journal to the appropriate accounts in the general ledger. Refer to Figure 16–10 as you read the steps for posting amounts from this column.
1. Enter the transaction date in the general ledger account Date column. 2. Enter the journal letters and page number in the Posting Reference
column of the ledger account. Use CR for cash receipts journal. 3. In the Credit column of the ledger account, enter the amount from
the General Credit column of the cash receipts journal. 4. Compute and enter the new account balance in the proper
Balance column. For the Office Equipment account shown inFigure 16–10, use the Debit Balance column. If the account balance is zero, draw a line through the appropriate Balance column.
5. Return to the cash receipts journal and enter the general ledger account number in the Posting Reference column.
The cash receipts journal entry for the December 16 transaction is now posted. All transactions in the General Credit column are posted this way.
Figure 16–10 Posting from the General Credit Column of the Cash Receipts Journal
Footing, Proving, Totaling, and Ruling the Cash Receipts Journal
Follow these steps to complete the cash receipts journal. Refer to Figure 16–11 on page 468.
1. Draw a single rule across the six amount columns, just below the last transaction.
2. Foot the columns. 3. Test for the equality of debits and credits as follows.
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TEACHC Critical Thinking
Applying Procedures Have students examine Figure 16-10 (Digital Transparency 16-19). Ask: How frequently are individual amounts in the General Credit column posted? daily Ask: Why? to ensure that accounting information remains current and accurate OL
M Math Skill PracticeCalculating Balances Refer students to Figure 16-10. Ask: If South Branch H.S. Ath. has a December 10 balance of $2,350, what is the new balance as of December 12? $850 ($2,350 � $1,500 � $850) OL
D Diff erentiated Instruction
Visual-Spatial Learning Have students examine the Posting Reference column of the cash receipts journal in Figure 16-10. Ask: What information does this give you? Postings were made to customer accounts on December 5 and 12 and to the Offi ce Equipment account on December 16. OL
Posting to General and Subsidiary Ledger Accounts Use Demonstration Problem 16-7 in Chapter 16 Fast File for step-by-step practice posting to general and subsidiary ledger accounts. The problem also appears on the TeacherWorks Plus.
EXTENDED SKILL PRACTICE
C
D
M
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Debit Columns Credit Columns Sales Discounts $ 30 General $ 30 Cash in Bank 17,283 Sales 9,700 Sales Tax Payable 582 Accounts Receivable 7,001 Total $ 17,313 Total $ 17,313
4. In the Date column, on the line below the single rule, enter the date the journal is being totaled.
5. On the same line in the Account Name column, enter the word Totals. 6. Enter the column totals, in ink, just below the footings. 7. Double-rule the amount columns.
Review the completed cash receipts journal. Consider time saved by using this special journal to record cash receipts in one location instead of on many general journal pages. After the cash receipts journal is footed, proved, totaled, and ruled, the column totals are posted to the general ledger.
Figure 16–11 Totaled and Ruled Cash Receipts Journal
Posting Column Totals to the General LedgerStarting Line uses a cash receipts journal with six amount columns. Only
five of them are posted to the general ledger. The General Credit column total is not posted. The entries in this column have already been posted individually to the general ledger accounts. (See Figure 16–10.)
The total in each amount column is posted to the general ledger account named in the column heading. See Figure 16–12. The column heading indicates whether to post the amount to the ledger account’s Debit or Credit column.
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SECTION 16.2
TEACHC Critical Thinking
Comparing Refer students to Figure 16-11 (Digital Transparency 16-20). Ask: How many postings should be made to Cash in Bank? one Ask: How many postings would be made to Cash in Bank if these transactions were recorded in the general journal? 16 OL
R Reading StrategyReading Accounting Forms Refer students to Figure 16-11. Ask: After the cash receipts journal has been posted, how many postings affected general ledger accounts? six Ask: How many postings were made to subsidiary ledger accounts? 11 OL
D Diff erentiated Instruction
English Learners Refer students to Figure 16-11. Point out that all transactions are listed in the order in which they occurred. Ask: What is the term used to identify this process? chronological order EL
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SECTION 16.2
CULTURAL DIVERSITY
Figure 16–12 Posting Column Totals from the Cash Receipts Journal
Math: Solving Equations Students use manipulatives and symbols to solve simple equations.
TEACHC1 Critical ThinkingApplying Procedures Ask: What is used to indicate that a column total is not posted? a check mark in parentheses under the column total OL
C2 Critical ThinkingSynthesizing Ask: Why is the Accounts Receivable Credit column posted both daily and at month-end? Individual amounts are posted daily to update the subsidiary ledger, and the column total is posted at month-end to update the controlling account. OL
C3 Critical ThinkingDrawing Conclusions A schedule of accounts receivable is prepared at various intervals, generally monthly. Ask: What is the purpose of the Schedule of Accounts Receivable? to prove that the sum of the individual subsidiary accounts equals the controlling account balance and to have access to updated customer information in a timely manner OL
Misinterpreting Gestures Divide the class into groups and have each group research common gestures in one country that frequently does business with the United States. Students can find information on a particular culture’s gestures at their local library or on the Internet. Have students create a chart comparing the meaning of different gestures in their country of study and in the United States. As a class, share each group’s findings. Then discuss the impact that misinterpreting gestures can have on doing business with other cultures.
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Schedule You might think of a schedule as a timetable. In accounting, a schedule is a detailed list of the items that make up a general ledger account balance.
CommonMistakes
Refer to Figure 16–12 on page 469 and follow these steps to post column totals to the general ledger.
1. Place a check mark in parentheses under the General Credit column total to indicate that this total is not posted.
2. Post the Sales total to the Sales account Credit column.3. Post the Sales Tax Payable total to the Sales Tax Payable account
Credit column.4. Post the Accounts Receivable total to the Accounts Receivable
controlling account Credit column. 5. Post the Sales Discounts total to the Sales Discounts account Debit
column. 6. Post the Cash in Bank total to the Cash in Bank account Debit
column. 7. Compute new balances for each general ledger account. 8. Write each account number in parentheses below the double rule in
the cash receipts journal.
Reading Check Define What does it mean to “foot” the journal?
Using the Schedule of Accounts ReceivableWhat Is a Schedule of Accounts Receivable?
Accountants prepare a schedule for each subsidiary ledger to deter-mine whether the subsidiary ledger’s sum equals the controlling account’s ending balance.
Proving the Accounts Receivable Subsidiary Ledger
To prove the accounts receivable subsidiary ledger, accountants prepare a schedule of accounts receivable that lists each charge customer, the balance in the customer’s account, and the total amount due from all customers. The Accounts Receivable account is the controlling account for the accounts receivable subsidiary ledger. That is, the controlling account is a summary of all customer accounts in the subsidiary ledger. At month-end after all posting is completed, the balance of Accounts Receivable(controlling) in the general ledger should equal the total of the balances of the individual accounts receivable subsidiary ledger accounts.
The schedule of accounts receivable may be prepared on plain paper, accounting stationery, or on a computer. The heading identifies the schedule type and the date. All customer accounts appear in alphabetical order, as they do in the accounts receivable subsidiary ledger. All accounts are included, even those with zero balances. This prevents omitting a customer by mistake. Figure 16–13 shows The Starting Line's schedule of accounts receivable for the end of December. Its total amount to be received from all customers is $10,404, which matches the balance of the Accounts Receivable account in the general ledger. This proves the accounts receivable subsidiary ledger.
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SECTION 16.2
TEACHC1 Critical ThinkingApplying Procedures Refer students to Figure 16-12 (Digital Transparency 16-21). Ask: How do you know where to post the column totals? They are posted to the general ledger account named in the column heading. OL
C2 Critical ThinkingPredicting Consequences Have students look at Figure 16-12 and assume that the total of the Accounts Receivable Credit column was posted as a credit to Sales. Ask: What is the effect of this error on Sales and Accounts Receivable (controlling)? both Sales and Accounts Receivable would be overstated. OL
C3 Critical ThinkingApplying Procedures Since cash is the most vulnerable asset, businesses must protect and also verify its accuracy. Ask: After posting to the Cash in Bank account, how would you verify its accuracy? Cash in Bank account balance must agree with check stub balance. AL
Reading CheckTo “foot” the journal means to write column totals in small penciled figures below the single ruling. It is written in pencil so that it can be erased if a mistake is discovered.
Common Mistakes Understanding the use of these terms in the context of accounting is critical. Discuss and demonstrate with examples until all students have a clear understanding.
Customer Preferences for Payment of Goods and Services Ask students to interview managers of local businesses to learn about the payment method customers prefer. Have students gather information regarding the percentage of customers who use cash, debit cards, personal checks, and credit cards to pay for their goods and services. Have students compare their fi ndings and then discuss the differences between the businesses they contacted.
EXTENDING THE CONTENT
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SECTION 16.2
Detecting Errors in the Subsidiary LedgerProving the accounts receivable subsidiary ledger with the controlling
account verifies that the sum of the subsidiary ledger equals the controlling account’s ending balance. This internal control procedure uncovers certain errors such as failing to post a transaction, or miscalculating an account bal-ance. It does not ensure that transactions were posted to the correct customer account. The subsidiary ledger and the controlling account can balance even if an amount was posted to the wrong account. Often this type of error is discovered when a customer finds the error on a bill and reports it.
Internet Sales How Do Internet Companies Receive Cash?
Companies can sell products with little expense and effort over the Internet, but they must have procedures and systems for processing online sales transactions. Companies can use an Internet merchant account for credit and debit card payments or an online payment service such as PayPal. Most Internet sales systems batch transactions daily to provide updated sales and inventory entries for the company’s computer systems.
Online sales transactions must be secure. Businesses can use a card verification service to authenticate credit card security codes and personal identification data to protect against online fraud.
DEBIT CREDIT
BALANCEDEBIT CREDITDESCRIPTIONDATE
POST.REF.
ACCOUNT NO.ACCOUNT
20--Dec. 6 2 5 9 00
6 1 0 0 0017 4 0 5 0010 4 0 4 00
11 3 0 5 001 5 9 00
7 0 0 1 00
Balance14
3131
✓
G20S12
CR13
Accounts Receivable 115
Starting Line Sports GearSchedule of Accounts Receivable
December 31, 20--
10 4 0 4 00
3 7 1 0 00
5 0 0 003 7 1 002 1 2 003 1 8 00
1 0 0 0 005 3 0 00
1 0 6 0 001 0 6 00
2 5 9 7 00
Break Point Sports ClubpJoe DimaioRobert GalvinCasey KleinyAnita MonteroShashi RahimGabriel RamosSouth Branch High School AthleticsgMegan SullivangTammy’s Fitness ClubyKim WonggLara Youngg
Total Accounts Receivable
The balance of theTAccounts ReceivableAaccount should equalathe total of the scheduletof accounts receivable.o
Figure 16–13 Schedule of Accounts Receivable
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TEACHR Reading Strategy
Reading Accounting Forms Refer students to Figure 16-13 (Digital Transparency 16-22). Ask: How many journal amounts were posted to Accounts Receivable? three Ask: Where did they originate? general journal p. 20, sales journal p. 12, and cash receipts journal p. 13 OL
C1 Critical ThinkingDrawing Conclusions Have students examine Figure 16-13. Ask: Since Joe Dimaio and Robert Galvin’s accounts have no balance, why are they listed on the schedule? It is important for management to know the balance of all customer accounts, even if they are zero, and it prevents omitting a customer in error. OL
C2 Critical ThinkingConnecting to Financial Literacy Many businesses sell products over the Internet. Ask: Why do you think it is important for merchandising businesses to sell online using a Web site, in addition to selling in retail stores? Answers will vary but should include: can shop any time, easy, increases sales with little expense, etc. OL
Connect to HistoryCCoonnnneecctt ttoo HHiissttoorryyrr
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ASSESSSECTION 16.2 ASSESSMENT RESOURCES Use these resources to assess mastery of section content.• Chapter Study Guides and Working
Papers (Problem 16-3)• Presentation Plus!
glencoe.com
Online Learning Center: Click on Student Center. Click on Self-Assessment Quizzes and select Chapter 16.
SECTION 16.2 ASSESSMENT
Reinforce the Main IdeaBankcard Sales: Cash rec. journal; Dr.
Cash In Bank; Cr. Sales, Sales Tax Pay.Sale of Merchandise on Account: Sales
journal; Dr. Accts.Rec/Customer; Cr. Sales, Sales Tax Pay.
Sale of Asset for Cash: Cash rec. journal; Dr. Cash in Bank; Cr. Asset
Cash Sales: Cash rec. journal; Dr. Cash in Bank; Cr. Sales, Sales Tax Pay.
Math for Accounting1. $583.00 ($550 � 1.06)2. $48.85 (1% � $46.53 � $0.47;
$46.53 � $0.47 � $46.06; $46.06 � $2.79 � $48.85); note: the discount is on merch. before taxes (see p. 395).
PROBLEM 16–3General Credit $105; Sales Credit $6,200; Sales Tax Pay. Credit $372; Accts. Rec. Credit $5,580; Sales Discounts Debit $110; Cash in Bank Debit $12,147; total debits/credits $12,257
CLOSESynthesizing Write the following statement on the board: Cash receipts journal entries are posted at various times. Ask: How frequently are Accts. Rec. credit amounts posted? daily Ask: General Credit amounts? daily Ask: Column total amounts? monthly
Math for AccountingYou are hired to audit the books for a computer software retailer, Software Biz. As you review the books, you realize that the sales tax was not calculated on a sales slip. You also want to estimate cash receipts from a sale. On a separate sheet of paper, make the following calculations:1. Accounts Receivable—
Business World; Sales Slip 47: software for $550; sales tax at 6%. What is the total due?
Sales tax 2.79 Total $49.32Terms: 1/10, n/30.How much will be received if it is paid within the discount period?
PROBLEM 16–3 Completing the Cash Receipts Journal
The cash receipts journal for the month of January is provided in your working papers and illustrated here. INSTRUCTIONS In your working papers, foot, prove, total, and rule the cash receipts journal.
CASH RECEIPTS JOURNAL PAGE
SALES TAXPAYABLECREDIT
ACCOUNTSRECEIVABLE
CREDIT
GENERALCREDIT
CASHIN BANKDEBIT
SALESDISCOUNTS
DEBIT
SALESCREDITACCOUNT NAMEDATE
DOC.NO.
POST.REF.
1
2
3
4
5
6
7
8
9
1
2
3
4
5
6
7
8
9
75 00
30 00
80 003 038 00
75 005 300 001 272 002 352 00
30 00
62 00
48 00
80 003 100 00
2 400 00
300 0072 00
5 000 001 200 00
20--Jan. 3
58
15152030
✓
✓
155——✓
115
R502R503R504T42T42
R505R506
Jennifer SmithWilton High SchoolStore EquipmentCash SalesBankcard SalesNorwin High SchoolSupplies
10
Reinforce the Main IdeaCreate a table similar to this one to identify the journal to be used and the accounts to be debited and credited for each transaction.
SECTION 16.2 • ASSESSMENT
After You Read
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SECTION 16.2
QUIZ 1. Which journal is used to record all cash receipt transactions? cash receipts journal
2. How frequently are individual amounts posted from the General Credit column? daily3. What column total in the cash receipts journal is not posted? General Credit4. Where are the column totals of the cash receipts journal posted? general ledger account
named in the column heading5. How is the Accounts Receivable Subsidiary ledger proved? by comparing the Schedule of
Accounts Receivable total to the controlling account
SEC TION 16.2
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CHAPTER 16 • VISUAL SUMMARY
glencoe.com Download the vocabulary review, i-Summary, and i-Quiz for Chapter 16.
mmCCCC
Conc
epts
Record transactions in sales and cash receipts journals
Post from the sales journal to customer accounts in the accounts receivable subsidiary ledger.
Post column totals from the sales journal to general ledger accounts.
Journal Column Total
Sales Journal Sales Credit Column
Sales Tax Payable Credit Column
Accounts Receivable Debit Column
Is Posted To:
Sales Account
Sales Tax Payable Account
Accounts Receivable Account
Proc
edur
es
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CHAPTER 16
Visual SummaryAfter students have looked at the Visual Summary, challenge them to create their own diagram of the Procedures section. Tell them that this diagram could be used to help them remember where to post column totals for the Sales Journal and for the Cash Receipts Journal. Choose several to discuss and share with the class.
English Language LearnersStudents whose primary language is not English might benefit from extra review or tutoring at this point. You might encourage them to write this information on index cards to use as reference: 1) Sales Journal—names of individual column amounts and where they are posted; and 2) Cash Receipts Journal—names of individual column amounts and where they are posted. Pair ELLs with students who are fluent in English to review the Procedures part of the Summary. Provide more examples for the pairs to work through together.
Student Edition• Reading Check, pp. 459, 470• Section Assessments 1, 2: pp. 461, 472• Review and Activities, p. 474• Standardized Test Practice, p. 475• Chapter 16 Problems, pp. 477–479• Real-World Applications and Connections,
pp. 480–481
Teacher Edition• Section Quizzes 1, 2,: pp. 461, 472
Fast File Chapter 16 Resources (on TeacherWorks Plus)• Concept Assessment• Quick Quiz• Chapter Quiz
• Chapter Test • Performance Task Assessment List• Rubric
CHAPTER 16 ASSESSMENT RESOURCES Use these resources to review, assess, or reteach the chapter.
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CHAPTER 16 • REVIEW AND ACTIVITIES
1. How do special journals save time and increase accuracy? The details of transactions can be reflected in the general ledger. However, this requires many journal lines. Special journals are used to divide the record keeping, and the totals are transferred to the general ledger. How does this increase accuracy?
Answering the Essential Question
Vocabulary Check 2. Content Vocabulary Define each of the terms below in your own words. Then explain why each is
important to the accounting process • special journals (p. 453)
3. Academic Vocabulary Use a dictionary to find the meanings of each academic vocabulary word. Then write two sentences for each word, using a different meaning of the word in each sentence. The sentences should clearly reflect what the words mean
• impose (p. 455) • sum (p. 470)
Concept Check 4. Evaluate True or False: The larger the company, the more likely special journals are used. Defend your
response. 5. Name four commonly used special journals and describe the transactions entered in each. 6. List the steps required to record transactions in the sales journal. 7. Analyze When are transactions in the cash receipts journal posted to the accounts receivable subsidiary
ledger? Why? 8. Which columns in the sales journal are double-ruled? What does the double rule indicate? 9. Which sales journal column total is posted to the general ledger Sales account? 10. Synthesize When posting column totals from the cash receipts journal to the general ledger, which
total is not posted? What would be the result of posting this total to the general ledger? 11. What is the purpose of a schedule of accounts receivable?
After You Read
English Language Arts 12. Partner with another student in your class
to role play a sales interaction. One student acts as a buyer, and the other as the seller of an item you choose. The interaction should include discussing the benefits of the item and why the buyer should want to purchase it, demonstrating how the item works,
questions from the buyer to the seller, and negotiation of the price. At the end of the purchase, the buyer and seller work together to process the sales order according to the instructions in the text.
NCTE 12 Use language to accomplish individual purposes.
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CHAPTER 16
Review and Activities
After You ReadAnswering the Essential Question
1. The intent of this essential question is to help students use inquiry to arrive at an understanding of the basic role of accounting. Once they see the benefi t of accounting processes on a personal level with their own money, they can generalize and broaden that understanding to businesses.
Vocabulary Check 2. Content Vocabulary See the
glossary for defi nitions of these terms. Have students share and discuss their defi nitions.
3. Academic Vocabulary Answers will vary. Possible answer: The laws impose strict restrictions on selling certain products to minors.
Concept Check4. True. A large company usually has a
volume of transactions that require a more effi cient system, such as using special journals, for recording transactions that are similar in nature.
5. 1) sales journal, used to record all sales of merchandise on account; 2) cash receipts journal, used to record all cash received; 3) purchases journal, used to record any purchase on account; 4) cash payments journal, used to record all payments of cash
6. Remember to journalize from left to right. 1) Enter the sales slip date in the Date column. 2) Enter the sales slip number in the Sales Slip No. column. 3) Enter the customer’s name in the Customer’s Account Debited column. 4) Enter the total of the merchandise sold (the amount in the subtotal box on the sales slip) in the Sales Credit column. 5) Enter the amount of the sales tax in the Sales Tax Payable Credit column. 6) Enter in the Accounts Receivable Debit column the total amount to be received (from the total box on the sales slip).
7. They are entered daily to be certain that the balance in customers’ accounts are always current.
8. The three account columns are double-ruled to indicate that the totals have been verifi ed.
9. Sales Credit column10. General Credit column. Entries in this column
have already been posted to the general ledger accounts, so posting here would produce an error in calculation.
11. To prove the subsidiary ledger
Math12. $48,435 � $72,650 � .6666 or 67%
English Language Arts13. Student interactions should meet the
requirements, discuss the benefi ts, demonstrating the uses, and discussing the price of the item. Students should correctly process the sales order.
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CHAPTER 16 • STANDARDIZED TEST PRACTICE
Multiple Choice1. A check mark next to a transaction entered in the sales journal indicates that the
a. transaction has been posted to the accounts receivable subsidiary ledger. b. transaction was recorded using a verified source document.c. balance has been carried over to the accounts receivable subsidiary ledger.d. payment for the sale has been received.
2. Special journals are useda. in place of the general journal.b. to simplify the journalizing and posting process. c. to record transactions that cannot be recorded in the general journal.d. for types of transactions that are made infrequently.
3. A journal amount column that is not headed with an account name is called aa. special amount column.b. general amount column. c. date column.d. posting reference column.
4. The Accounts Receivable controlling account in the general ledgera. shows the total amount owed by all customers when posting is complete.b. helps keep the general ledger a balancing ledger in which debits equal credits.c. offers a means of testing the accuracy of the customer account balances.d. does all of the foregoing.e. does none of the foregoing.
Short Answer5. What is done after the sales journal has been footed, proved, totaled, and ruled?
True or False6. The cash receipts journal is used only for cash receipts resulting from sales.
Extended Response7. Explain how the accounts receivable subsidiary ledger is proven.
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Standardized Test Practice
Multiple Choice1. a2. b3. b4. d
Short Answer6. The column totals are posted to the
general ledger.
True or False7. False
Extended Response8. Prepare a schedule showing all AR
accounts in alphabetical order with their balances. Verify that the total of the balances on the schedule equals the balance of the AR accounts in the general ledger.
CHAPTER 16
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CHAPTER 16 • COMPUTERIZED ACCOUNTING
Mastering Sales and Cash ReceiptsMaking the Transition from a Manual to a Computerized System
MANUAL METHODSMANUAL METHODS COMPUTERIZED METHODS
Setting up Customer Records• Ledger sheets or cards are prepared with customer
account details such as customer name, address, and contact information.
• Account activities are posted to the customer’s subsidiary ledger account.
Setting up Customer Records• Assign each customer an ID code.• Record details of customer accounts into customer
records.• The customer’s sales and payment history is
maintained automatically.
Issuing and Recording a Credit Memorandum• A credit memorandum is prepared.• A journal entry is prepared to record the credit
memorandum.• The journal entry is posted to the customer’s account
and to the general ledger.
Issuing and Recording a Credit Memorandum• The accounting software will create a credit memo
and apply it to the appropriate outstanding customer invoice.
• The credit memo is posted automatically to the customer account and to the general ledger.
For detailed instructions, see your Glencoe Accounting Chapter Study Guides and Working Papers.
QuickBooks®
Q How do I set up a new customer account?
A • From the Lists menu, select Customer:Job List.
• Click the Customer:Job drop-down list and select New.
• Enter customer name and contact information.
• Click on the Additional Info tab and enter any additional customer data.
Q How do I issue and record a credit memorandum?
A • From the Customers menu, select Create Credit Memos/Refunds.
• Enter customer name, date, and credit invoice number.
• In the Item column, select the item returned.
• Enter the number returned in the Qty field.
Q How do I set up a new customer account?
A • From the Maintain menu, select Customers/Prospects.
• Assign a Customer ID to the customer account.
• Enter customer name and contact information.
• Click on the Sales Defaults tab.• Verify or enter the appropriate sales
default GL account number.
Q How do I issue and record a credit memorandum?
A • From the Tasks menu, select Sales/Invoicing.
• Enter a customer ID and a reference number.
• Click on the Apply to Sales tab and fill out the Apply to Invoice.
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Computerized Accounting
Using Customer ID codes, Peachtree can update customer sales and payment history records when you enter invoices or cash receipts. Credit memorandums are applied directly to the appropriate outstanding invoice and posted to the general ledger and subsidiary ledger automatically.
QuickBooks®
Using customer names, QuickBooks can update customer sales and payment history records when you enter invoices or cash receipts. You need to apply the credit memorandums directly to the appropriate outstanding invoices and QuickBooks will post them to the general ledger and subsidiary ledger automatically.
CHAPTER 16
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CHAPTER 16 • PROBLEMS
PROBLEM 16–4 Recording and Posting Sales Transactions
Shutterbug Cameras records its transactions in special journals. The accounts receivable subsidiary ledger and certain general ledger accounts are included in your working papers.
INSTRUCTIONS In your working papers: 1. Record each transaction on page 12 of the sales journal or on page 13
of the cash receipts journal. 2. Post to the customer accounts in the accounts receivable subsidiary
ledger on a daily basis. 3. Foot, prove, total, and rule the sales journal. 4. Post the column totals from the sales journal and the cash receipts
journal to the general ledger accounts named in the column headings. 5. Prepare a schedule of accounts receivable.
Date Transactions
May 1
379
1215
18
Sold merchandise on account to Yoko Nakata, $500 plus 4% sales tax of $20, Sales Slip 220.Cash sales totaled $1,500 plus $60 in sales tax, Tape 10.Cash sales totaled $200 plus $8 in sales tax, Tape 11.Sold merchandise on account to Heather Sullivan for $100 plus sales tax of $4, Sales Slip 223.Cash sales totaled $400 plus $16 in sales tax, Tape 12.Sold $3,000 in merchandise on account to FastForward Productions plus sales tax of $120, Sales Slip 225.Sold merchandise on account to Yoko Nakata, $200 plus sales tax of $8, Sales Slip 226.
PROBLEM 16–5 Recording and Posting Cash Receipts
River’s Edge Canoe & Kayak uses special journals and an accounts receivable subsidiary ledger for recording business transactions. The accounts receivable subsidiary ledger accounts and certain general ledger accounts are included in your working papers. The current account balances are recorded in the accounts.
INSTRUCTIONS In your working papers: 1. Record the transactions on page 7 in the cash receipts journal. 2. Post the amounts from the Accounts Receivable Credit column to
the customers’ accounts in the accounts receivable subsidiary ledger. Post the individual amounts in the General Credit column to the general ledger accounts.
Step–by–Step Instructions:Problem 16–4
1. Select the problem set for Shutterbug Cameras (Prob. 16–4).
2. Rename the company and set the system date.
3. Enter all sales on account transactions using the Sales/Invoicing option.
4. Record all cash sales using the Receipts option.
5. Print a Sales Journal report and a Cash Receipts Journal report.
6. Proof your work.7. Print a General Ledger
report and Customer Ledgers report.
8. Complete the Analyze activity.
9. End the session.
TIP: When you print a report, such as the General Ledger, you can use the filter options to customize the information that appears on the report.
3. Foot, prove, total, and rule the cash receipts journal. 4. Post the column totals to the general ledger accounts named in the
column headings. 5. Prepare a schedule of accounts receivable.
Date Transactions
May 2
5
710
151518
20
30
Received $400 from Paul Drake to apply on his account, Receipt 505.Received $2,940 from Adventure River Tours in payment of its $3,000 account less a 2% cash discount of $60, Receipt 506. Sold old shelving (Store Equipment) for $50, Receipt 507.Wildwood Resorts sent us a check for $2,425 in payment of its account, $2,500 less a 3% cash discount of $75, Receipt 508.Cash sales totaled $2,000 plus $100 in sales tax, Tape 20.Bankcard sales were $3,000 plus $150 in sales tax, Tape 20.Celeste Everett sent us a check for $150 to apply on her account, Receipt 509. Isabel Rodriquez sent us $100 to apply on her account, Receipt 510.Cash sales were $4,500 plus $225 sales tax, Tape 21. Bankcard sales totaled $3,800 plus sales tax of $190, Tape 21.
Step–by–Step Instructions:Problem 16–5
1. Select the problem set for River’s Edge Canoe & Kayak (Prob. 16–5).
2. Rename the company and set the system date.
3. Record all cash receipts using the Receipts option.
4. Print the following reports: Cash Receipts Journal, General Ledger, and Customer Ledgers.
5. Proof your work.6. Complete the Analyze
activity.7. End the session.
TIP: You can apply a partial payment from a customer.
SMART GUIDE
Step–by–Step Instructions:Problem 16–5
1. Restore the Problem16-5.QBB file.
2. Enter all cash receipts using the Receive Payments option.
3. Print a Journal report, and a General Ledger.
4. Print a Customer Balance Summary.
5. Proof your work.6. Complete the Analyze
activity.7. Back up your work.
PROBLEM GUIDE
QuickBooks®
CHAPTER 16 • PROBLEMS
Identify the source document that would be used to record bankcard sales and cash sales.
Analyze
PROBLEM 16–6 Recording and Posting Sales and Cash Receipts
Buzz Newsstand had the following sales and cash receipt transactions for May. In your working papers, the accounts receivable subsidiary ledger and general ledger accounts have been opened with current balances. INSTRUCTIONS 1. Record the sales and cash receipts for May on page 11 of the sales
journal and page 11 of the cash receipts journal. 2. Post to the customer accounts in the accounts receivable subsidiary
ledger on a daily basis. 3. Post from the General Credit column of the cash receipts journal on a
daily basis. 4. Foot, prove, total, and rule both journals. 5. Post the column totals of the sales journal to the general ledger
accounts named in the column headings. 6. Post the column totals from the cash receipts journal to the general
ledger accounts named in the column headings. 7. Prepare a schedule of accounts receivable.
Problem 16–6
Use the source documents in your working papers to complete this problem.
SOURCE DOCUMENTPROBLEM
CHALLENGEPROBLEM
CONTINUE
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CHAPTER 16
PROBLEM 16–5Recording and Posting Cash ReceiptsCash Receipts Journal totals: General Cr. $50 Sales Cr. $13,300 Sales Tax. Pay. Cr. $665 Accts. Rec. Cr. $6,150 Sales Discounts Dr. $135 Cash in Bank Dr. $20,030
Total Debits/Credits $20,165
Ending debit balances: Cash in Bank $27,530 Accts. Rec. $750 Store Equipment $2,950 Sales Discounts $1,335 Accts. Rec./Adventure River Tours $0 Accts. Rec./Paul Drake $400 Accts. Rec./Celeste Everett $250 Accts. Rec./Isabel Rodriguez $100 Accts. Rec./Wildwood Resorts $0
A tape from the cash register would be used to record bankcard sales and cash sales.
Analyze
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Step–by–Step Instructions: Problem 16–6
1. Select the problem set for Buzz Newsstand (Prob. 16–6).
2. Rename the company and set the system date.
3. Enter all sales on account transactions.
4. Record all cash receipts. 5. Print a Sales Journal report
and a Cash Receipts Journal report.
6. Proof your work. 7. Print a General Ledger
report and Customer Ledgers report.
8. Complete the Analyze activity.
9. End the session.
SMART GUIDE
Date Transactions
May 1
3
5
7
9
10
12
15
151518
20
22
23
24
26
27
28
3030
Sold $300 in merchandise plus 6% sales tax of $18 on account to Ilya Bodonski, Sales Slip 170.Received $490 from Katz Properties in payment of its $500 account balance less a 2% discount of $10, Receipt 145.As a favor, sold $60 in supplies to Straka Stores, received cash, Receipt 146.Rothwell Management Inc. sent us a check for $294 in payment of its $300 account balance less a $6 cash discount, Receipt 147.Sold $100 in merchandise plus $6 sales tax on account to Saba Nadal, Sales Slip 171. Sold $600 in merchandise plus $36 sales tax on account to Java Shops Inc., terms 2/10, n/30, Sales Slip 172.Sold $50 in merchandise plus $3 sales tax on account to Lee Adkins, Sales Slip 173.Received a check for $196 from Rolling Hills Pharmacies in payment of its $200 account less a 2% cash discount of $4, Receipt 148.Cash sales were $2,400 plus $144 sales tax, Tape 33.Bankcard sales totaled $2,000 plus sales tax of $120, Tape 33.Sold $1,000 in merchandise plus sales tax of $60 on account to Katz Properties, terms 2/10, n/30, Sales Slip 174.Received $100 from Ilya Bodonski to apply on her account, Receipt 149.Sold $800 in merchandise plus $48 sales tax on account to Rothwell Management Inc., terms 2/10, n/30, Sales Slip 175. Lee Adkins sent us a check for $53 in payment of his account, Receipt 150.Received a $106 check from Saba Nadal to apply on account, Receipt 151.Java Shops Inc. sent us a check for $200 to apply on account, Receipt 152.Sold $200 in merchandise plus sales tax of $12 on account to Lee Adkins, Sales Slip 176. Received $75 from the sale of excess store equipment, Receipt 153.Cash sales totaled $2,600 plus $156 sales tax, Tape 34.Bankcard sales were $2,200 plus sales tax of $132, Tape 34.
Calculate the percent of sales discounts given in May to total May sales.
Analyze
Step–by–Step Instructions:Problem 16–6
1. Restore the Problem16-6.QBB file.
2. Enter all sales on account transactions.
3. Record all cash receipts.4. Print a Journal report, and
a General Ledger report.5. Proof your work.6. Print a Customer Balance
Summary.7. Complete the Analyze
activity. 8. Back up your work.
PROBLEM GUIDE
QuickBooks®
Chapter 16 Problems 479
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CHAPTER 16
PROBLEM 16–6 Recording and Posting Sales and Cash ReceiptsSales Journal totals: Sales Cr. $3,050 Sales Tax Pay. Cr. $183 Accts. Rec. Dr. $3,233 Total Debits/Credits $3,233
Cash Receipts Journal totals: General Cr. $135 Sales Cr. $9,200 Sales Tax Pay. Cr. $552 Accts. Rec. Cr. $1,459 Sales Discounts Dr. $20 Cash in Bank Dr. $11,326 Total Debits/Credits $11,346
Ending debit balances: Cash in Bank $16,326 Accts. Rec. $2,774 Supplies $240 Store Equipment $3,925 Sales Discounts $520
Accounts receivable ledger balances: Lee Adkins $212 Ilya Bodonski $218 Java Shops Inc. $436 Katz Properties $1,060 Saba Nadal $0 Rolling Hills Pharmacies $0 Rothwell Management Inc. $848
Schedule of Accounts Receivable $2,774
The percentage of sales discounts is 0.16% ($20 � [$9,200 � 3,050])
Analyze
CHALLENGEPROBLEM
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CHAPTER 16
— Springdale Movie Theater —— SSp iringddale Movie Theater —
H.O.T.
REAL-WORLD Applications & ConnectionsWITHHIGHER ORDER THINKING
Allocating ResourcesWhen you operate a business, you must constantly evaluate the effective use of resources, including time, money, materials, space, and staff. Imagine you own Retro Café, a late-night spot for young professionals and college students, open 11 a.m. until midnight. Your review of the month’s financial reports reveals that the café is showing a net loss for the third month in a row.
INSTRUCTIONS Design a form to gather opinions on the menu, staffing, and operating hours. Think about what it is important for you, as the business owner, to know. What are the staffing implications if most sales occur after 3 p.m.?
Merchandising Business: Movie TheaterYou work in the accounting department for Springdale Movie Theater. The owners are considering enlarging the concession area one and one-half times its current size to offer a wider variety of foods. No theater seats would be lost. The cost is estimated at $200,000. Sales figures for the past three years follow.
Year Ticket Sales Concession SalesYear 1 $4,800,000 $1,800,000
Year 2 5,100,000 1,600,000
Year 3 5,400,000 1,480,000
INSTRUCTIONS 1. Use a spreadsheet program to analyze the sales and
planned expansion. What percent of total sales are ticket sales and concession sales each year?
2. Assuming concession sales remain at $ 1,480,000, what percentage increase in concession revenue is needed to pay for the renovation costs in one year?
CASE STUDY
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Merchandising Business: Movie Theater1. Year 1: ticket sales 72.7%, concession
sales 27.3%; Year 2: ticket sales 76.1%, concession sales 23.9%; Year 3: ticket sales 78.5%, concession sales 21.5%
2. 13.5% ($200,000 � $1,480,000)
AllocatingResources
1) Some possible questions: Menu: What menu items are most popular? What items do you receive the most complaints about? What requests do you receive most often for items to add to the menu? Staffi ng: Which shift do you fi nd the most hectic? Why? How many tables can you effectively serve? Hours: Which hours are the busiest? For employees who close: Are customers rushed to leave at the end of the night? At what times do you have few customers?
2) The café may need fewer staff before 3 p.m. and more staff after.
CASE STUDY
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CHAPTER 16
H.O.T. Audit
Government AccountantGovernment accountants and auditors maintain the financial records of government agencies and audit private companies and individuals subject to government regulations and taxation. Federal government employees may work for the Internal Revenue Service (IRS), or in financial management, financial institution examination, or budget analysis and administration. Government accountants may also keep track of how the government spends taxpayer money. They help create budgets, analyze publicly funded programs, and make sure money is collected and spent as required by law. Government accountants play a crucial role in ensuring a country operates smoothly.
RESEARCH AND SHARE a. Use the Internet to
locate three sources of information on forensic accounting.
b. What level of education is required to be a government accountant? What are the roles and responsibilities of a government accountant?
Examining Your CurrencyYou have learned that businesses have cash receipts in various forms including transactions with charge cards and bankcards; checks; and currency.
INSTRUCTIONS What do you know about the cash you use? Write a brief report about U.S. paper currency. Address what currency is made of, the seven denominations in circulation today and the portrait appearing on each, the purpose of a security thread, and whether torn bills are acceptable.
Bank FeesAs the controller for Tri-State Furniture and Carpet Company, you review all source documents before approving bills for payment. After a bill is approved, the bill is sent to the company treasurer for payment. You also review the monthly bank statements for fees and charges made against Tri-State’s checking account. For all bank card deposits in excess of $35,000 for the month, the bank charges a 4% fee. If less than $30,000, the bank charges a 5% fee. During the month Tri-State made the following bank card deposits:
April 9: $8,800
April 16: $9,200
April 23: $7,700
April 30: $10,200
Upon reviewing the bank statement, the bank deducted $1795 for bank card fees.
INSTRUCTIONS For what amount should the bank have charged Tri-State for bank card fees? If Tri-State recorded the bank card fees for the month based on what the bank charged, what correcting entry would have to be made?
Chapter 16 Real-World Applications and Connections 481
Answers will vary. Possible answer:a) National Association of Forensic
Accountants (NAFA), Association of Certifi ed Fraud Examiners (ACFE), Forensic Accounting Association of North America, Inc. (FAANA), and others
b) Bachelor’s degree in accounting or related discipline, and possible CPA certifi cation. They maintain fi nancial records of government agencies and audit private companies and individuals. They help create budgets, track costs, and analyze publicly funded programs, making sure money is both collected and spent as required by law.
Examining Your Currency
The report should include: bills are made of cloth; the seven denominations and the portraits on each are: $1 – George Washington, $2 – Thomas Jefferson, $5 – Abraham Lincoln, $10 – Alexander Hamilton, $20 – Andrew Jackson, $50 – Ulysses S. Grant, $100 – Benjamin Franklin; the security thread is a protection device because it is difficult to copy; torn bills are good as long as they are more than 50% intact.
H.O.T. Audit Bank FeesDr. Cash in Bank $359Cr. Bank Card Fees $359
Have students conduct research to discover how the government knows if you are earning money, and what types of income are exempt from federal income tax.
