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Understanding Sales and Cash Receipts Journals: Key Terms and Transactions

This chapter covers essential terminology related to sales and cash receipts journals, including definitions of customer, sales tax, cash sales, and credit card sales. Key transactions from November illustrate practical examples: a sale on account to Children's Paradise, cash and credit sales totaling $5,787.60, and cash received on accounts with discounts. The importance of recording sales returns and allowances is highlighted, with an example of issuing credit for returned merchandise. Understanding these concepts is vital for effective financial record-keeping.

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Understanding Sales and Cash Receipts Journals: Key Terms and Transactions

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  1. Chapter 10 Sales and Cash Receipts journal

  2. Terms you need to know • Customer – a person or business to who merchandise or services are sold. • Sales Tax – a tax on a sale of merchandise or services.

  3. Sales journal

  4. Nov 3. Sold merchandise on account to Children’s Paradise, $816.00 plus sales tax, $48.96; total, $864.96. Sales Invoice No. 76

  5. Aplia “ On your own” 10-1

  6. Cash Receipts Journal

  7. Terms you need to knowIf you have your textbook look at page 277 • Cash Sale • A sale in which cash is received for the total amount of the sale. • Credit Card Sale • A Sale in which cash is received for the total amount of the sale.

  8. Cash Receipt journal

  9. November 4 Recorded Cash and Credit card sale, $5,460.00 plus sales tax, $327.60 total $5787.60. Cash Tape No 4

  10. Nov. 6 Received Cash on account from Fiesta Costumes $2162.40, covering s 69 Receipt No. 90

  11. When we give a discount to our customer. November 7. Received cash on account from Cumberland Center, $1,176.00, covering Sale Invoice No. 74 for $1,200, less 2% discount, $24.00. Receipt No. 91 Sales Discount- terms of contract 2/10 N30 2% discount if paid within 10 days of sale or balance is paid in 30

  12. Aplia 10-2 “On your own”

  13. Recording Transactions Using a General Journal • Sales Return and Allowance – When we sell something and have it returned. • We have to return the money owed for the item plus the taxes that went with it….

  14. March 11, Granted Credit to Village Crafts for merchandise returned, $58.50, plus sales tax, $3.51, from S160; total, $62.01. Credit Memorandum No. 41

  15. Problems 11-1,2,3,4 • Computer Problem 11-3

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