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Accounting for Sales and Accounts Receivable

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  1. Chapter 7 Accounting for Salesand Accounts Receivable Section 1: Merchandise Sales Section Objectives • Record credit sales in a sales journal. • Post from the sales journal to the general ledger accounts.

  2. Posting from a Sales Journal

  3. Objective 2 Post from the sales journal to the general ledger accounts.

  4. With a sales journal it is not necessary to post each credit sale individually to general ledger accounts. Instead, summary postings are made at the end of the month after the amount columns of the sales journal are totaled.

  5. Before any posting takes place, the equality of the debits and credits recorded in the sales journal is proved by comparing the column totals. Oh yeah!

  6. Proof of Sales Journal Debits Accounts Receivable Debit column $5,886.00 Credits Sales Tax Payable Credit column Sales Credit column $ 436.00 5,450.00 $5,886.00

  7. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 648.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00  (111) (231) (401) ACCOUNT Accounts Receivable ACCOUNT NO. DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  3,240.00 23 J2 162.00 3,078.00 25 J2 486.00 2,592.00 1 Page 206 Summary postings are made at the end of the month. 31 Totals 5,886.00 436.00 5,450.00 111 31

  8. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 648.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00  2 (111) (231) (401) ACCOUNT Accounts Receivable ACCOUNT NO. DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  3,240.00 23 J2 162.00 3,078.00 25 J2 486.00 2,592.00 1 Page 206 S1 shows the data is posted from page 1 of the sales journal. 31 Totals 5,886.00 436.00 5450.00 111 31 S1

  9. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 648.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00  2 (111) (231) (401) ACCOUNT Accounts Receivable ACCOUNT NO. DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  3,240.00 23 J2 162.00 3,078.00 25 J2 486.00 2,592.00 1 3 Page 206 Column totals are posted to general ledger accounts involved. 31 Totals 5,886.00 436.00 5,450.00 111 31 S1 5886.00

  10. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 648.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00  2 (111) (231) (401) ACCOUNT Accounts Receivable ACCOUNT NO. DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  3,240.00 23 J2 162.00 3,078.00 25 J2 486.00 2,592.00 1 3 Page 206 4 The new account balance is entered in the Debit Balance or Credit Balance column. 31 Totals 5,886.00 436.00 5,450.00 111 31 S1 5886.00 8,478.00

  11. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 648.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00  2 (111) (231) (401) 5 ACCOUNT Accounts Receivable ACCOUNT NO. DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  3,240.00 23 J2 162.00 3,078.00 25 J2 486.00 2,592.00 1 3 Page 206 4 The general ledger account numbers are entered in parentheses under column totals. 31 Totals 5,886.00 436.00 5,450.00 111 31 S1 5886.00 8,478.00

  12. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 600.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1,080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00 ACCOUNT Sales Tax Payable ACCOUNT NO. 231 DATE DESCRIPTION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 1 Balance  756.00 11 CP1 756.00 -0- 23 J2 12.00 12.00 25 J2 36.00 48.00 31 S1 436.00 388.00 2 5 1 3 4 31 Totals 5,886.00 436.00 5,450.00 (111) (231) (401)

  13. SALES JOURNAL PAGE 1 SALES ACCOUNTS SALES TAX DATE SLIP CUSTOMER’S NAME POST. RECEIVABLE PAYABLE SALES NO. REF. DEBIT CREDIT CREDIT 20-- Jan. 3 1101 Roy Anderson 432.00 32.00 400.00 8 1102 Cathy Ball 648.00 48.00 600.00 11 1103 Barbara Coe 756.00 56.00 700.00 15 1104 Amalia Rodriguez 324.00 24.00 300.00 18 1105 Fred Wu 810.00 60.00 750.00 21 1106 Linda Carter 486.00 36.00 450.00 28 1107 Kim Ramirez 108.00 8.00 100.00 29 1108 Mesia Davis 1,080.00 80.00 1000.00 31 1109 Alma Sanchez 972.00 72.00 900.00 31 1110 Roy Anderson 270.00 20.00 250.00 ACCOUNT Sales ACCOUNT NO. 401 DATE DESCRIPTION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20-- Jan. 31 S1 5,450.00 5,450.00 2 1 3 4 31 Totals 5,886.00 436.00 5,450.00 (111) (231) (401) 5

  14. Advantages of a Sales Journal

  15. Advantages of a Sales Journal • Saves time, effort, and recording space • Makes journalizing and posting more efficient • Requires only three summary postings to the general ledger at the end of each month • Allows division of work • Improves the audit trail

  16. R E V I E W SECTION Complete the following sentences: A business that sells goods that it has produced is a(n) _____________________. manufacturing business A business that sells goods that it purchases for resale is a(n) _____________________. merchandising business The stock of goods a merchandising business keeps on hand is ____________________. merchandise inventory

  17. R E V I E W SECTION Complete the following sentences: A journal used to record sales of merchandise on credit is called a(n) ____________. sales journal A journal used to record only one type of transaction is a(n) _____________. special journal A ledger that contains accounts of a single type is a(n) ________________. subsidiary ledger

  18. Thank You for using College Accounting, 11th Edition Price • Haddock • Brock