Sales on Account What journal do we use?

TEST YOUR KNOWLEDGE

TEST YOUR KNOWLEDGE

What journal is used for the following:

Purchased merchandise for cash? Purchased merchandise on account? Sold merchandise on account Paid advertising expense? Sold merchandise for cash Purchased Supplies-office on account? Returned Merchandise? Replenish Petty Cash Account? Received Credit Card and Cash Sales?

Cash Payment JournalPurchases JournalSales JournalCash Payment JournalCash Payment JournalGeneral JournalGeneral JournalCash Payment JournalCash Receipts Journal

LESSON 10-2

Journalizing Cash Receipts Using a Cash Receipts Journal

Only includes cash receipt transactionsReceived Cash from Sales for cash/creditReceived payment on account

Two Types of Cash Sales: Cash Sale: cash is received at time of transaction Credit Card Sale: sale where credit card used received for transaction

Point-of-sale (POS) terminal: computer used to collect, store, and report all the information of a sales transaction: Where can you find a POS? Tells what, when, and how sold Scans the UPC barcode on items

PROCESSING SALES TRANSACTIONS

Cash Register Receipt

Cash Register Receipt

Point-of-Sale (POS) Terminal Receipt

Point-of-Sale (POS) Terminal Receipt

Customer ReceiptTraditional

PROCESSING SALES TRANSACTIONS

Terminal summary (TS): • Summarizes the cash and credit card

sales of a POS terminal • TS = source document for sales for

cash/credit card

• Who has the most sophisticated POS system?

Terminal SummaryTerminal Summary

BATCH REPORT

Batch Out: process of preparing a batch report of credit card sales from POS POS sends message of sales to bank Bank sends sales to the Federal Reserve

Bank Federal reserve acquires the money from

purchaser’s bank Federal reserve deposits money to business

Batch ReportBatch Report

CASH AND CREDIT CARD SALES

October 1. Recorded cash and credit card sales

$5,460.00, plus sales tax, $327.60; total, $5,787.60. TS 42.• What Accounts are impacted and how?

•Cash – is increased as a ?•Sales Tax Payable – increases as a ?•Sales - increases as a ?

Cash SalesSales Tax Payable

CASH AND CREDIT CARD SALES

Oct. 1. Recorded cash and credit card sales, $5,460.00, plus sales tax, $327.60; total, $5,787.60. Terminal Summary 42.• What Accounts are impacted and how?   Cash Receipts Journal           Page:      

Date Account TitleDoc No

Post.Ref

General Accounts Receivable 

CreditSales Credit

Sales Tax Payable Credit

Sales Discount Debit

Cash DebitDebit Credit

              

                       

CASH RECEIPTS ON ACCOUNT

October 1. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90.• What accounts are impacted and how?

•Cash – increased as ?•Accts Rec/ - decreased as ?

Cash Acct Rec/Country Crafters

CASH RECEIPTS ON ACCOUNT

Oct 1. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 141.

  Cash Receipts Journal           Page:      

Date Account TitleDoc No

Post.Ref

General Accounts Receivable 

CreditSales Credit

Sales Tax Payable Credit

Sales Discount Debit

Cash DebitDebit Credit

  1 TS42       5460.00 327.60  5787.60

              

                       

CASH RECEIPTS WITH A DISCOUNT

Sales Discount: cash discount on sales taken by customer for quick payment incentive Contra Account to Sales What side is the Normal balance?

debit side (increases)

JOURNALIZING CASH RECEIPTS WITH DISCOUNTS

Oct 1. Received cash on account from Cumberland Center, covering Sales Invoice No. 74 for $1,200.00, less 2% discount. Receipt No. 142.• What accounts are impacted and how?

•Accounts Rec/Cumberland Center – decreases as ?•Cash – Increase as ?•Sales Discount – Increases as?

Cash Sales DiscountAcct. Rec/Cumberland Center

JOURNALIZING CASH RECEIPTS WITH DISCOUNTS

Oct 1. Received cash on account from Cumberland Center, covering Sales Invoice No. 74 for $1,200.00, less 2% discount. R 142.

4. Enter Accounts Receivable as the original invoice amount.

1. Enter the date.

2. Enter Account title as Cumberland Center.

3. DOC No. = R142.

5. Enter amount of sales discount.

6. Enter Cash debit as Accounts receivable - sales tax = Cash amount

  Cash Receipts Journal           Page:      

Date Account TitleDoc No

Post.Ref

General Accounts Receivable 

CreditSales Credit

Sales Tax Payable Credit

Sales Discount Debit

Cash DebitDebit Credit

  1 TS42       5460.00 327.60  5787.60

  1Country Crafters R141 2162.40 2162.40             

                       

TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL

TERMS REVIEW

cash sale credit card sale point-of-sale (POS) terminal terminal summary batch report batching out cash receipts journal sales discount

Assignment

Work Together 10-2