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HFT 2401. Chapter 7 Specialized Journals and Subsidiary Ledgers. Specialized Journals. Leads to greater efficiency in a manual system Allows for reduced postings to the general ledger Daily transactions are recorded in the subsidiary ledger and updated periodically Cash Journal

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hft 2401

HFT 2401

Chapter 7

Specialized Journals and

Subsidiary Ledgers

specialized journals
Specialized Journals
  • Leads to greater efficiency in a manual system
  • Allows for reduced postings to the general ledger
    • Daily transactions are recorded in the subsidiary ledger and updated periodically
      • Cash Journal
      • Payroll Journal
general ledger and control accounts
General Ledger and Control Accounts
  • Control accounts are used for general ledger accounts that have numerous entries. They supply the detail for each account
    • Accounts Receivable
    • Accounts Payable
    • Prepaid Insurance
    • Prepaid Expenses
control accounts
Control Accounts
  • Balances of the control accounts must equal the balance recorded on the general ledger
    • Accounts Receivable Subsidiary Ledger – balances due from each guest or city ledger (direct bill) account must total & equal the general ledger
    • Accounts Payable Subsidiary Ledger– amounts due to each supplier must total and equal the amount recorded on the general ledger
lodging industry accounts receivable trade
Lodging Industry Accounts Receivable - Trade
  • Guest Ledger – Guests currently in house or house accounts to be settled on a current basis
  • City Ledger – Departed guests. Have credit terms established. Can be guest or non-guest related.
specialized journals1
Specialized Journals
  • Advantages
    • Increased efficiency – one line used in the journal
    • Time saved in posting to general ledger accounts – only column totals are posted to the general ledger, not individual detail
specialized journals2
Specialized Journals
  • Advantages
    • Improvements to internal controls
      • Separation of duties in recording transactions
      • Reduction of errors in general ledger postings as the number of transactions are reduced
types of journals used
Types of Journals Used
  • Sales journal – S, SJ, or IJ
  • Cash receipts journal – CR or CJ
  • Purchases journal – P or PUR
  • Cash disbursements journal - CD
  • General journal - GJ
requirements for posting
Requirements for Posting
  • Supporting evidence / Documentation
  • Posting references column
  • Amount
sales journal
Sales Journal
  • Used for posting all transactions on accounts
  • May be either cash or charge transactions
  • Also posted to customers individual subsidiary ledger simultaneously
cash receipts journal
Cash Receipts Journal
  • Used to record cash inflows only
  • Headers to journal would include offset accounts to post credit to:
    • Accounts Receivable
    • Sales
    • Other
purchases journal
Purchases Journal
  • Used to record all purchases on account
  • Headers can include different accounts for the type of purchase i.e. – food purchases, beverage purchases, supply purchases
cash disbursements journal
Cash Disbursements Journal
  • Records all transactions involving the payment of cash
    • Accounts payable
    • Petty cash
    • Payroll
    • Immediate disbursements
payroll journal
Payroll Journal
  • Records Payroll Expenses
    • Salary expense
    • Deductions
      • FWT – Income Taxes
      • FICA / Medicare
      • State & Local Taxes
      • Insurance
      • Other
general journal
General Journal
  • A “catch-all” journal
  • Used to record transactions that do not fit into a specialized journal
specialized journals for lodging
Specialized Journals for Lodging
  • Front office cash receipts and disbursements journal
  • Allowance journal
  • Transfer journal
homework
Homework
  • Problem 5
  • Problem 7
  • Problem 9