The four types of special journals found in the accounting department are listed as sales, cash receipts, purchases

, and cash payments. The sales journal allows accounting to use a simple, single line entry for any cash transaction that is made. This helps to save time and provides simplicity. This journal would be used for each credit sale made. The cash receipts journal demonstrates a daily and weekly tracking of cash balances for the business. This would be utilized when a transaction for merchandise is done involving cash. Purchases for accounting are followed in a journal by using the special purchases journal entry. This allows an accountant to track frequently made purchases more efficiently. Each time a purchase is made, the accountant lists the transaction in this location. Finally, the cash payments journal is the way an accountant would track all transaction payments made from the company’s bank account. A subsidiary ledger is used in addition to the general ledger and is an expansion of the general ledger as well. Its purpose is to group accounts that share a common characteristic while freeing the general ledger of details of each and every transaction or balance. A general ledger that summarizes subsidiary ledger data is called a control account. The purpose of this account is to keep track of the correct balance while keeping the general ledger free of excess details. Data is collected on individual customers through the accounts receivable subsidiary ledger. This is one of two accounts that act as control accounts for the subsidiary ledger. The second type is the accounts payable subsidiary ledger. This account collects and follows the transactions of individual creditors. Advantages of these ledgers is that they make it possible to track the transactions of individual customers, providing up-to-date balances on each as well as recognizing any errors that may have transpired in the process.

Reference: Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial accounting (6th ed.). Hoboken, NJ: Wiley

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