Accounting

Kevin Yau Liu
III L.D.V
14/04/11
Saint George
International School
Of
Panama

Content

Explain the way to record transactions in the Sales Journal and Cash Receipts Journal.

The CashReceipts Journal is used to record sales of merchandise for cash. (Credit sales are not recorded here; they belong in the sales journal.)All transactions in the cash receipts journal involve thereceipt of cash, so you'll find a column for debiting cash (Cash DR.). There is also a debit column for sales discounts in case the transaction involves a sale that is discounted. To balance these debits;you'll find three credit columns. Sales and Accounts Receivable are the two accounts that will mostly be involved in these transactions (besides cash, of course). The column for Other Accounts is forall other types of cash-receiving transactions that don't involve sales or accounts receivable.
Sales journals are used for recording sales of merchandise on account, aka credit sales. (Cash sales arenot recorded here; they belong in the cash receipts journal.) Since every sales entered in the sales journal will result in a debit to accounts receivable and a credit to the sales income account, itis not necessary to repeat that information, or even both sides of the resulting journal entry in the sales journal. All that is required here is the date and amount of the sale and which customer isresponsible for paying. This makes keeping the journal current very simple.

Explain to record transactions in the Purchases Journal

In a typical 2-column manual accounting system, transactionsare entered as debits to one (or more) account and balancing credits to one (or more) account. If you consider some recurring transactions (such as sales) that will hopefully occur many times duringan accounting cycle, all this double entry can add up to a lot of work. That's where special journals come into play. Special journals are designed as a simple way to record a single type of...