Receipts Learning Objectives Explain and Journalize Entries for Sales Sales Discounts and Sales Returns and Allowances Record to Subsidiary Ledgers and Post to General Ledger Sales Transactions and Returns ID: 760354
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Slide1
Chapter 9
Sales and Cash
Receipts
Slide2Learning Objectives
Explain and Journalize Entries for Sales, Sales Discounts, and Sales Returns and Allowances
Record to Subsidiary Ledgers and Post to General Ledger Sales Transactions and Returns
Record and Post Cash Receipts Transactions and Prepare a Schedule of Accounts Receivable
Slide3Explain and Journalize Entries for Sales, Sales Discounts, and Sales Returns and Allowances
Learning Objective 1
Slide4Seller’s View of a Merchandise Company – Gross Sales
Retailer – a business that buys items from manufacturers and wholesalers and resells them to customersGross Sales – cash or charge sales rung up or recorded in a register
Slide5Seller’s View of a Merchandise Company – Sales and Returns
Sales Journal EntrySales Returns and Allowances - either a price reduction, new product or refund (Contra Revenue)
Figure 9.1 Recording Cash and Charge Sales for the Day
Figure 9.2 Issuing a Credit Memorandum in the General Journal
Slide6Seller’s View of a Merchandise Company – Sales Discount
Sales Discount – percentage reduction on invoice for prompt payments (Contra Revenue)Discount period is the time when a discount is granted
Slide7Seller’s View of a Merchandise Company – Discount Period
Discount period is the time when a discount is grantedCredit period is the length of time allowed to pay the amount owed on the bill
Slide8Seller’s View of a Merchandise Company – Sales Discount
Figure
9.3 Recording Sales Discount
Slide9Sales Tax Payable
Taxes collected on sales and forwarded to the state.
This is a liability to the retailer
The sales tax on the cash purchase is calculated as follows:
$1,800 × .05 = $90 Tax
$1,800 + $90 tax = $1,890 Cash
Slide10Sales Tax Payable
Here is how the sales tax on the charge sale is computed:$1,200 × .05 = $60 Tax $1,200 Charge + $60 Tax = $1,260 Accounts Receivable
Figure 9.4 Sales with Sales Tax
Slide11Sales Tax Payable
Slide12Record to Subsidiary Ledgers and Post to General Ledger Sales Transactions and Returns
Learning Objective 2
Slide13Transactions on Account for Art’s Wholesale Clothing Company
Art’s Wholesale Clothing Company, as a wholesaler, buys merchandise from suppliers and sells it to retailers, who in turn sell it to individual consumers.The following transactions occurred in April for Art’s Wholesale Clothing Company:
Slide14Sales Invoice
Figure 9.5 Sales Invoice
Slide15April 3 Sold account merchandise to Hal’s Clothing, $800. Terms 2/10, n/30.
The analysisThe journal entry
Figure
9.6 Merchandise Sold and Accounts Receivable
Slide16Accounts Receivable Subsidiary Ledgers
A special ledger
Contains a single type of account
Subsidiary account for each customer
Arranged alphabetically
Can be in the form of a file, a notebook, or computer tapes or disks
Posted to general ledger and recorded to the subsidiary ledger
Slide17Accounts Receivable Subsidiary
Ledger
Figure
9.7
Partial
General Ledger of
Art’s Wholesale
Clothing Company
and Accounts
Receivable
Subsidiary Ledger
Slide18Accounts Receivable Subsidiary Ledgers
The general ledger account is called the controlling account.
It summarizes or controls the subsidiary ledger.
The total of the individual accounts will equal the controlling account ending balance.
Slide19The Transactions that Occurred In April
Figure 9.8 Before Posting and Recording Sales Transactions
Slide20Posting and Recording Sales Transactions
Slide21When the subsidiary ledger is updated, a (✓) is placed in the PR column of the general journal
Posting and Recording Sales Transactions
Figure 9.9 Transaction for April 3 Posted and Recorded
Slide22Figure 9.9 Transaction for April 3 Posted and Recorded (cont.)
Slide23The Credit Memorandum
Notification sent to a customer
Indicates the amount of the goods returned or amount allowed for damaged goods
The amount is subtracted (credited) from the customer’
s account
Slide24Sample Credit Memorandum
Figure
9.10 Sample Credit Memorandum from Art’s Wholesale Clothing Company
Slide25Postings and Recordings for the Credit Memorandum
Figure 9.11 Postings and Recording for the Credit Memorandum into the Subsidiary and General Ledgers
Slide26Record and Post Cash Receipts Transactions and Prepare a Schedule of Accounts Receivable
Learning Objective 3
Slide27Cash Receipts Transactions
Cash receipts for sales are journalized and posted
Cash receipts on account are
Journalized for the month
Posted to the general ledger
Posted to the accounts receivable subsidiary ledger
Slide28Cash Receipts Transactions Examples
Slide29Received check from Hal’s Clothing for payment of invoice no. 1, less 2% discount.
Figure
9.12 Recording Sales Discount in General Journal
Slide30Cash Receipts Transactions Occurred For Art’s Wholesale Clothing In April
Figure 9.13 Journalized Cash Receipts Transactions
Slide31Figure 9.13 Journalized Cash Receipts Transactions (cont.)
Slide32Cash Receipts Transactions Occurred For Art’s Wholesale Clothing In April
Slide33Cash Receipts Transactions Posted to the Ledger and Subsidiary Ledger
Slide34Schedule of Accounts Receivable
Figure
9.14
Schedule of Accounts Receivable
Slide35Summary of the chapter
Sales Returns and Allowances and Sales Discount are contra-revenue accounts.
Net Sales = Gross Sales - Sales Returns and Allowances - Sales Discounts.
Discounts are not taken on sales tax, freight, or goods returned. The discount period is shorter than the credit period.
Sales Tax Payable is a liability account.
The normal balance of the accounts receivable subsidiary ledger is a debit balance.
Slide36Summary of the chapter
A (
) in the PR of the general journal means the subsidiary ledger has been updated.
The accounts receivable subsidiary ledger, organized in alphabetical order, is not in the same book as Accounts Receivable, the controlling account in the general ledger.
When a credit memorandum is issued, the result is that Sales Returns and Allowances increase and Accounts Receivable decreases.
When we record this entry into the general journal, we assume all parts of the transaction will be posted to the general ledger and recorded in the subsidiary ledger.
Slide37Summary of the chapter
At the end of the month, the total of all customers’
ending balances in the accounts receivable subsidiary ledger should be equal to the ending balance in Accounts Receivable, the controlling account in the general ledger.
The schedule of accounts receivable is an alphabetical list of companies with an outstanding balance.
Slide38Questions?
Slide39Figure 9.15 General Journal for September 18 and 19 and Blank Accounts Receivable Subsidiary Ledger
Slide40Figure 9.16 General Journal for May 18 and 19 and Blank Accounts Receivable Subsidiary Ledger