Module VI

Special Journals

Scope of the Module

Module VI of the subject contains the following lessons:
Lesson 1. Special Journals and Subsidiary Ledgers
Lesson 2. Postings from Special and General Journal to Subsidiary and
General Ledger and Preparation of Trial Balance

Overview of the Module

In our discussion on accounting for service and merchandising concerns thus far,
only the general journal has been used for recording all types of transactions. This
module deals with the use of special journals for recording large number of similar
transactions and also with the use of subsidiary ledgers. It introduces special journals
for recording purchases and sales of merchandise; cash payment and cash receipts
journals. Lesson 2 covers the techniques for posting from special journals to both
subsidiary and general ledger accounts and the process by which the subsidiary ledger
is reconciled with the accounts Receivable in the general ledger.

Objectives of the Module

After studying this module, you will be able to:
1. recognize and show how a firm uses special journals for similar transactions;
2. determine the difference between subsidiary and general ledgers;
3. record transactions in special and general journals;
4. post from special and general journals to general and subsidiary ledgers;
5. balance and rule special journals.

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Accounting 1
Module VI
Lesson 1. SPECIAL JOURNALS AND SUBSIDIARY LEDGERS

Lesson Objectives:
After studying this lesson on special journals and subsidiary ledgers, you will be able
to:
1. identify the different types of special journals;
2. determine the transactions that will be recorded in each type of special
journal;
3. recognize and show how to use subsidiary ledgers and present properly the
necessary detailed information.

The clerical tasks of gathering, recording and summarizing data for each transaction
as recorded daily in the general journal becomes time-consuming and expensive when
transactions of various categories occur in large numbers monthly. In this case, it is
more practical to group similar transactions and to provide a separate journal for each
group. By doing so, it will allow for a division of labor, more efficient processing of data,
and reduction of posting time. Many different format or types of special journals could
be used. The type of special journals presented here are for illustration purposes only.
Those journals actually used by a company are functions of the types of transactions
encountered and of the imagination of the person designing them.
Transactions that cannot appropriately be recorded in any of the special journals are
recorded in the general journal.

SPECIAL JOURNAL

Special journals are journals that record transactions of the same nature. These
journals are used to help process transactions more efficiently. Any number of special
journal columns can be set-up for collecting changes in accounts frequently used. An
entry can fit in just one line; explanations are omitted, therefore, the recording effort is
reduced. There are at least four common types of special journals. As earlier stated, the
design of these journals is dependent upon the needs of the business enterprise. The
design of the special journal in this lesson is very much different from those presented
in American-authored textbooks. It will serve only as an illustration for purposes of this
lesson. The four (4) common types of special journals are:

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Sales Journals
This is used for recording fees earned on account. It will record transactions
involving sale of merchandise; however, this can be used also for sales of merchandise
on accounts only (cash sales will be recorded directly in Cash Receipts Journal).
Sales Journal Page ___
Date Sold to Accounts Receivable Cash Sales Sales
Dr. Dr. Cr.

In recording a sales transaction in this journal, see to it that only two (2) columns are
affected not the three columns simultaneously.
Listed below are the possible transactions to be recorded in this journal and the
columns affected:
1. Sale of merchandise on credit
Dr. Accounts Receivable xx
Cr. Sales xx
2. Cash Sales of merchandise
The column Cash Sales is used only if the total amount of sales is paid for in
full by the customer. This transaction is recorded twice: (a) Sales Journal – to
give effect to the sale of merchandise and (b) Cash Receipts Journal – to give
effect to the money received. In both journals, an offsetting account, Cash
Sales, is used. This amount is debited in the Sales Journal and credited in the
Cash Receipts Journal. The amount must be the same.
First Recording: Sales Journal
Dr. Cash Sales xx
Cr. Sales xx
Second Recording: Cash Receipts Journal
Dr. Cash xx
Cr. Cash Sales xx
An alternative to process No. 2 above is to record cash sales of merchandise
directly in the Cash Receipts Journal by an entry:
Dr. Cash xx
Cr. Sales xx
If this is the approach followed, this should be consistently applied and the
form of the Sales Journal can be modified as follows:

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 Sales Journal Page ___
Date Sold to Accounts Receivable Sales
Dr. Cr.

Since the amounts for accounts receivable and sales (above) would always
be the same, the form can be simplified further as follows:
Sales Journal Page ___
Date Sold to Accounts Receivable Dr.
Sales Cr.

With the above form only one amount will be recorded in the sales journal for
each sales an account transaction. However, the total of the column should
be posted in the ledger of both the accounts receivable and sales accounts.
3. Sale of merchandise with down payment and the balance on account.
In the recording of merchandise other than that of cash sale on credit, the
amount must be passed through Accounts Receivable as a clearing account.
This type of transaction will be recorded twice.
First recording: Sales Journal
Dr. Accounts Receivable xx
Cr. Sales xx
Second recording: Cash Receipts Journal
Dr. Cash xx
Cr. Accounts Receivable xx
An alternative to process No. 3 is to record in the cash receipts journal, the
cash receipts portion of the transaction, represented by the down payment
and the balance, which is the sales on account portion will be recorded in the
sales journal. This therefore breaks up the transactions into two: the cash
portion and the sales in account portion.
4. Sales of merchandise with a promissory note.
This transaction is also recorded twice. (a) Sales Journal - to give effect to the
sale of merchandise, (b) General Journal - to give effect to the note received
from the customer.
First recording: Sales Journal
Dr. Accounts Receivable xx
Cr. Sales xx

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 Second recording: General Journal
Dr. Notes Receivable xx
Cr. Accounts Receivable xx
Receipts of note from customer.
An alternative to process No. 4 is to record the transaction only once. This will
be in the general journal with the following entry:
Dr. Notes Receivable xx
Cr. Sales xx

Cash Receipts Journals

It will record all cash received by the company from whatever sources. Every entry
recorded in this journal will involve a debit to the “Cash Dr.” column.
DATE RECEIVED CASH SALES ACCOUNTS CASH SUNDRY PR
FROM DISCOUNT RECEIVABLE SALES ACCOUNTS
Dr. Dr. Cr. Cr. Cr.

The Sundry Accounts column is provided to take care of accounts that cannot be
entered in any of the special columnar heading. In entering a transaction, see to it that
your total debit is equal to total credit.
Listed below are the possible transactions to be recorded in this journal and the
columns affected.
1. Investments of owner
Dr. Cash xx
Cr. Capital (under Sundry Accounts) xx
2. Cash sales of merchandise
Dr. Cash xx
Cr. Cash Sales xx
If the alternative described earlier to process No. 2 is consistently used, the
“Cash Sales, Cr.” column above in the Sales Journal will no longer be placed.
3. Collection within the discount period
Dr. Cash xx
Dr. Sales Discount xx
Cr. Accounts Receivable xx
4. Collection after discount period
Dr. Cash xx
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 Cr. Accounts Receivable xx
5. Collection of notes receivable with interest
Dr. Cash xx
Cr. Notes Receivable (under Sundry Accounts) xx
Cr. Interest Income (under Sundry Accounts) xx
6. Collection of notes receivable without interest
Dr. Cash xx
Cr. Notes Receivable (under Sundry Accounts) xx
7. Receipt of cash refund for damaged merchandise bought
Dr. Cash xx
Cr. Purchase Returns and Allowances xx
(under Sundry Accounts)

Purchase Journals
It will record all purchases of merchandise on account.
Purchase Journal Page ______
Date Purchased From Purchases Other Accounts Accounts Payable
Dr. Dr. Cr.

If there are other accounts which occur very often in a month, like store supplies or
office supplies, a separate column for each of these accounts may be provided. It is
also preferable to provide in the Purchase Journal a “Sundry Accounts, Dr.” column.
This will take care of accounts which are not provided a separate column.
Listed below are possible transactions to be recorded in this journal:
1. Cash Purchases
This account is credited in the purchase journal and debited in the Cash
Payment Journal. See to it that both amounts are the same.
The column Cash Purchases is used only if the total amount of purchases is
fully paid for by the company. This transaction, which is similar to the cash
sales of merchandise, is recorded twice: (a) Purchase Journal – to give effect
to the purchase of merchandise and (b) Cash Payment Journal – to give
effect to the cash disbursed. In both journals, an offsetting account is used.
First Recording: Purchase Journal
Dr. Purchases xx
Cr. Cash Purchases xx
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 Second Recording: Cash Payment Journal
Dr. Cash Purchases xx
Cr. Cash xx
An alternative approach for recording cash purchase of merchandise is to
record this directly in the Cash Payments Journal with the following entry:
Dr. Purchases xx
Cr. Cash xx
2. Purchase of merchandise on account
Dr. Purchases xx
Cr. Accounts Payable xx
3. Purchase of merchandise with down payment, balance on account
In the recording of purchase of merchandise other than that of cash purchase
and on credit, the amounts must be passed through accounts payable as a
clearing account. This transaction is recorded twice.
First Recording: Purchase Journal
Dr. Purchases xx
Cr. Accounts Payable xx
Second Recording: Cash Payment Journal
Dr. Accounts Payable xx
Cr. Cash xx
An alternative to recording a purchase which has a down payment portion on
account is to record directly in the Cash Payments Journal the down payment
by the following entry:
Dr. Purchases xx
Cr. Cash xx
The purchase on account portion will be recorded in the Purchase Journal as
follows:
Dr. Purchases xx
Cr. Accounts Payable xx
In effect, the transaction is broken down into two parts: the cash portion for
the down payment and the balance on account.
4. Purchase of Merchandise with a promissory note
First Recording: Purchase Journal
Dr. Purchases xx
Cr. Accounts Payable xx
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 Second Recording: General Journal
Dr. Accounts Payable xx
Cr. Notes Payable xx
The alternative approach to No. 4 is to record this only once in the General
Journal as follows:
Dr. Purchases xx
Cr. Notes Payable xx

Cash Payment Journals

It will record all cash disbursed or paid for whatever purpose. All transactions
involving a credit to cash are recorded in this journal.
CASH PAYMENT JOURNAL
DATE PAID TO ACCOUNTS CASH PURCHASES CASH SUNDRY PR
PAYABLE PURCHASE DISCOUNT ACCOUNTS
Dr. Dr. Cr. Cr. Dr.

Transactions involved:
1. Cash purchase of merchandise
This transaction is recorded first in the Purchase Journal to record the
purchase of merchandise, then recorded in the Cash Payment Journal to
reflect the cash payment. There will be no duplication of recording because
the “CASH PURCHASES” account is an offsetting account. Whatever amount
is credited in the Cash Purchase Dr. column of the purchase journal is also
the amount that is debited in the CASH PAYMENT journal. It will be recorded
in this manner:
Dr. Cash Purchases xx
Cr. Cash xx
As discussed earlier, the alternative to this process is to record directly in the
Cash Payments Journal all cash purchases instead of recording this first in
the Purchases Journal. This will eliminate the “Cash Payments, Dr.” column in
the Cash Payments Journal presented above.
2. Purchase of merchandise on account.
Dr. Purchases xx
Cr. Accounts Payable xx
3. Purchase of merchandise with down payment, balance on account.
(See transactions involved in purchase journal.)
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 First Recording: Consider the entire purchase as if it’s on account and record
it as follows:
Dr. Purchases xx
Cr. Accounts Payable xx
Second Recording: Record the down payment in the Cash Payment
Journal in this manner:
Dr. Accounts Payable xx
Cr. Cash xx
4. Payment of account within the discount period
Dr. Accounts Payable xx
Cr. Purchase Discount xx
Cr. Cash xx
5. Payment after the discount period
Dr. Accounts Payable xx
Cr. Cash xx
6. Payment of notes payable without interest
Dr. Notes Payable (under Sundry Accounts) xx
Cr. Cash xx
7. Payment of notes payable with interest
Dr. Notes Payable xx
Dr. Interest Expense xx
Cr. Cash xx
8. Cash withdrawal of the owner
Dr. XDrawing (under Sundry Accounts) xx
Cr. Cash xx
9. Gave a cash refund for detective merchandise
Dr. Sales Returns and Allowances
(under sundry Accounts) xx
Cr. Cash xx
10. Purchase of office equipment for cash
Dr. Office Equipment
(under Sundry Accounts) xx
Cr. Cash xx

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 11. Purchase of office equipment with down payment, balance on account.
First Recording: General Journal
Dr. Office Equipment xx
Cr. Accounts Payable
(full amount of purchase) xx
Second Recording: Cash payment journal for the down payment
Dr. Accounts Payable xx
Cr. Cash xx
An alternative to this is to break-up the transaction into the cash portion for
the down payment and the account portion. The former will be recorded in the
Cash Payment Journal as follows:
Dr. Office Equipment xx
Cr. Cash xx
The purchase on account portion will be recorded in the Purchase Journal as
follows:
Dr. Office Equipment xx
Cr. Accounts Payable xx

We have just illustrated a sample of the four (4) special journals and the
corresponding transactions involved. If there will be transactions that cannot be debited
to Cash and Purchases account, then the said transactions cannot be recorded in any
of the special journals. Instead, we record these type of transactions in the general
journal.
Examples of transactions that cannot be recorded in any of the four (4) special
journals.
1. Debit memorandum/Return of defective merchandise for credit
Dr. Accounts Payable xx
Cr. Purchase Returns and Allowances xx
2. Credit memorandum/Receipt defective merchandise for credit
Dr. Sales Returns and Allowances xx
Cr. Accounts Receivable xx
3. Issuance of promissory note to be applied to account
Dr. Accounts Payable xx
Cr. Notes Payable xx
4. Receipt of customer’s note to be applied to account
Dr. Notes Receivable xx
Cr. Accounts Receivable xx
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 5. Withdrawal of assets other than cash by the owner (Example: Owner
withdraws supplies for personal use.)
Dr. XDrawing xx
Cr. Supplies xx

Based on the above transactions, you can see that no debit to Cash or to Purchases
account and no credit to Cash and Sales account have ever been made.
Other entries which are recorded only in the General Journal are the adjusting,
correcting and closing entries. These are discussed in Module VII.

SUBSIDIARY LEDGERS

The procedure of recording all credit sales and payables in a single Accounts
Receivable and Accounts Payable makes it very difficult to determine the amounts
collectible from each customer and the amounts owed to individual creditors. To provide
this information, an account is needed for each customer and creditor to facilitate the
control of credit limits and timely payment of amounts owed. These accounts are kept in
a separate accounts receivable ledger and accounts payable ledger called Subsidiary
Ledger.
The subsidiary ledger is a group of accounts that represents subdivision of
general ledger accounts. The general ledger account for which a subsidiary ledger is
maintained is referred to as control account. Therefore, when you say Accounts
Receivable or Accounts Payable Ledger you are referring to the individual costumer or
creditor’s account and when you say Accounts Receivable Control Account or Accounts
Payable Control Account, you are referring to the general ledger account.
When several journals are used, the ledger accounts must indicate the specific
journal from which entries were posted. The following abbreviations indicated
references to special journal and general journal:
 SJ-1 – Sales Journal Page 1
 GJ-1 – General Journal Page 1
 PJ-1 – Purchase Journal Page 1
 CP-1 – Cash Payment Journal Page 1
 CR-1 – Cash Receipts Journal Page 1
Example of recording business transactions using special and general journals:
2011
Nov. 2 Fred, the owner invested P 250,000 in his business
3 Purchased from Pacific Office Machine Company equipment for P 50,000 cash
4 Purchased supplies from National Book Store P 10,000. TERMS 1/15, n/30
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 5 Purchased land P 200,000 and building P 300,000 from AC Realtor giving P 30,000
initial down payment and the balance payable in 5 years
6 Purchased merchandise from Ruby Co. P 60,000. TERMS 1/10, n/60
7 Returned defective merchandise to Ruby Co. for credit P 2,000
8 Purchased merchandise from ROSA Co. P 100,000 TERMS 1/10, n/60
9 Paid the account with National Book Store
10 Cash purchase of merchandise P 40,000
11 Sold merchandise for cash P 10,000
12 Sold merchandise to Rubic, Inc. P 50,000 with 10% down and the balance on account
with terms of 2/10, n/60
13 Rubic, Inc. returned damaged merchandise P 1,000
15 Paid salaries of employees P 15,000
16 Settled the accounts with Ruby Co.
20 Collected in full the accounts of Rubic, Inc.
21 Sold merchandise to Cariñosa, Inc. P 20,000. TERMS 2/10, n/60
27 Sold merchandise to Maligaya Co. P 30,000. TERMS 1/10, n/60

SALES JOURNAL Page 1

Date Sold To Accounts Cash Sales Sales
Receivable
Dr. Dr. Cr.
2011
Nov. 11 Cash 10,000 10,000
12 Rubic, Inc. 50,000 50,000
21 Cariñosa, Inc. 20,000 20,000
27 Maligaya Co. 30,000 30,000
100,000 10,000 110,000

PURCHASE JOURNAL Page 1

Date Purchased From Purchase Cash Purchase Accounts Payable
Dr. Dr. Cr.
2011
Nov. 6 Ruby Co. 60,000 60,000
8 Rosa Co. 100,000 100,000
10 Cash 40,000 40,000
200,000 40,000 160,000

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GENERAL JOURNAL Page 1
Date Description PR Dr. Cr.
2011
Nov. 4 Supplies 10,000
Accounts Payable – National Book Store 10,000
Purchased supplies on account.
5 Land 200,000
Building 300,000
Accounts Payable – AC Realtors 500,000
Purchased land and building.
7 Accounts Payable – Ruby Co. 2,000
Purchase Returns and Allowances 2,000
Returned defective merchandise.
9 Accounts Payable – National Book Store 100
Supplies 100
Discount granted on supplies purchased.
13 Sales Returns and Allowances 1,000
Accounts Receivable – Rubic, Inc. 1,000
Received defective merchandise.

CASH RECEIPTS JOURNAL Page 1

Date Received from Cash Sales Accounts Cash Sundry
Discounts Receivable Sales Accounts
Dr. Dr. Cr. Cr. Cr.
2011
Nov. 2 Fred 250,000 Fred, Capital 250,000
11 Cash 10,000 10,000
12 Rubic, Inc. 5,000 5,000
20 Rubic, Inc. 43,120 880 44,000
308,120 880 49,000 10,000 250,000
(10) (62) (11) (/)

CASH PAYMENTS JOURNAL Page 1

Date Paid to Accounts Cash Purchase Sundry PR
Payable Purchases Discount Cash Account
Dr. Dr. Cr. Cr. Dr.
2011
Nov. 3 Pacific Office Machines 50,000 Equipment (22) 50,000
5 AC Realtors 30,000 30,000

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 9 National Book Store 9,900 9,900
10 Cash 40,000 40,000
15 Payroll on Employees 15,000 Salaries (80) 15,000
16 Ruby Co. 58,000 580 57,420
97,900 40,000 580 202,320 65,000
(40) (/) (72) (10) (/)

After recording the transactions for the month of November, assuming that there are
no other transactions after November 27, we add the columns of the special journals.
Check the accuracy of the addition. Adding the columns is referred to as footing. So
when you say foot the journals, it simply means add the columns of the journal. To
check the quality of our debits and credits we will cross-foot the totals. The sum of the
total debits must equal the sum of the total credits. As an example, we will cross-foot
the Cash-Receipts and Cash-payments Journal. The totals of the Cash Receipts
Journals are as follows:
Dr. Cr.
Cash P 308,120 Accounts Receivable P 49,000
Sales Discount 880 Cash Sales 10,000
Sundry Accounts 250,000
Total Debits P 309,000 Total Credits P 309,000

The totals of the Cash Payments Journal are as follows:

Dr. Cr.
Accounts Payable P 97,900 Cash P 202,320
Cash Purchases 40,000 Purchase Discount 580
Sundry Accounts 65,000
Total Debits P 202,900 Total Credits P 202,900

The above cross-footing is never shown in the journal. It is shown only in a scratch
paper, or you can add it mentally or use a calculator for that matter. What is important is
that you maintain the equality of the debits and credits.

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Accounting 1
Module VI, Lesson 1
SELF- PROGRESS CHECK TEST

I. Multiple Choice.
_____ 1. Which of the following statements is not correct? The use of special
journal
a. facilitates division of labor in journalizing and posting.
b. systematizes the original entries of the major recurring transactions.
c. saves time in journalizing and posting.
d. has the major disadvantage that special journals make the use of
accounting machine less feasible.
_____ 2. When special journals are used, the sale of land on credit is generally
recorded in the
a. Sales Journal.
b. Cash Receipts Journal.
c. General Journal.
d. Cash Payment Journal.
_____ 3. An entry to record the conversion of an Accounts Receivable into a Notes
Receivable would generally be made in
a. Purchase Journal .
b. Cash Receipts Journal.
c. General Journal.
d. Cash payment Journal.
_____ 4. Which of the following statement is correct? The form of the journal used
by the individual firm in an industry
a. must be identical to those used by all business firms.
b. the subsidiary ledgers appear in the general ledgers.
c. individual costumers ledgers provide an important source for extending
credit.
d. Accounts Receivable in the general ledger is known as controlling
account.
_____ 5. Adjusting entries are recorded in what journal?
a. Sales Journal
b. General Journal
c. Purchase Journal
d. Cash Receipts Journal

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II. Identification.
On the blank before each number, write the special journal/s in which each of the
following transactions can be recorded.
_____ 1. Received payment from customers to apply on account.
_____ 2. Paid premium on a one-year insurance policy.
_____ 3. Reimbursed to a cash customer, who returned merchandise for which he
had paid for P 3,500.
_____ 4. Purchased automobile on account.
_____ 5. Owner withdrew supplies for personal use.
_____ 6. Cash sales of merchandise.
_____ 7. Cash purchases of merchandise.
_____ 8. Purchased a computer for cash.
_____ 9. Additional investments of P 60,000 by the owner into his business.
_____ 10. Withdrawal of P 15,000 by the owner for personal use.

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Accounting 1
Module VI
Lesson 2. POSTING FROM SPECIAL AND GENERAL JOURNALS TO
SUBSIDIARY AND GENERAL LEDGER AND PREPARATION OF
TRIAL BALANCE

Lesson Objectives:
After studying this lesson, you will be able to:
1. recognize and show how to post to subsidiary and general ledgers from the
special journals;
2. prepare a schedule of accounts receivable and accounts payable; and
3. prepare a trial balance.

Many types of business transactions occur with considerably frequency. In order to

reduce the amount of time required in the recording and posting of such transactions,
special journals are often used. This lesson focuses on “Postings” which require less
time as only the columnar totals representing several transactions are posted to the
accounts rather than each individual amounts. Posting references in the journals are:
accounts numbers (indicating postings to general ledger) and check marks (indicating
postings to subsidiary ledgers). If the check mark is written below the columnar totals, it
indicates that the totals are not to be posted to the general ledger.
The accounts receivable column of the Sales Journal and the Cash Receipts
Journal, the accounts payable column of Purchase journal and Cash Payment Journal,
and the accounts receivable and accounts payable in the General Journal are posted
daily in the individual customers’ ledger account and creditors’ ledger account in order
to spread the posting effect throughout the periods, to maintain control over customers’
credit limit, to provide statement of accounts to customers on a timely basis, and to
keep track of the amounts owed to creditors.
The accounts in the subsidiary ledgers are arranged alphabetically and to indicate
that postings have been made from the journals, check marks are used instead of
account numbers. After transferring the amounts of accounts receivable and accounts
payable to their respective subsidiary ledgers, check marks will be written in the
following manner:
1. In the sales journal and cash receipts journal. It will be written before the
amount of individual accounts receivable.
2. In the purchase journal and cash payment journal. It will be written before
the individual amounts of accounts payable.
3. In the general journal. It will be written in the post reference column below
the diagonal line. You will have to draw the diagonal line.

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 POSTINGS TO THE GENERAL LEDGER

From the General Journal

Post all amounts from the individual accounts including accounts receivable and
accounts payable to the general ledger, dated according to the date of transaction.
Write the account numbers in the post reference column. For accounts receivable and
accounts payable, write the account numbers above the diagonal line. The general
journal does not have special columns for controlling accounts. Because of this we have
to post the controlling accounts (accounts receivable and accounts payable) and the
individual ledger accounts of customers and creditors. If this is not done, the balance of
controlling accounts will not be equal to the total of the individual ledgers.
From the Sundry Columns of Cash Receipts and Cash Payment Journal
The accounts in the sundry column of cash receipts and cash payments journal are
posted individually to the general ledger, dated according to the date of transactions.
Write the account numbers in the post reference column provided for the sundry
account columns.
From the four (4) Special Journals
Columnar totals (except Sundry Accounts totals, cash sales totals, and cash
purchases totals) are posted to the general ledger accounts designated by the columnar
headings dated as of the end of the month or end of the year of the transactions
involved. After posting, write the account numbers below the totals posted. For the
totals of the Sundry columns which are not to be posted, place a check mark below the
totals.
To illustrate postings to the subsidiary and general ledgers, we will reproduce the
example shown in Lesson 1. The account titles and the corresponding account numbers
to be used are as follows:
Cash 10 Sales 60
Accounts Receivable 11 Sales Returns and Allowances 61
Supplies 15 Sales Discounts 62
Land 20 Purchases 70
Building 21 Purchase Returns and Allowances 71
Equipment 22 Purchase Discount 72
Accounts Payable 40 Salaries 80
Fred, Capital 50
The cash sales and cash purchases accounts are offsetting accounts and therefore
not included in the above list.

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SALES JOURNAL Page 1
Date Sold To Accounts Cash Sales Sales
Receivable Dr. Cr.
Dr.
2011
Nov. 11 Cash 10,000 10,000
12 Rubic, Inc. 50,000 50,000
21 Cariñosa, Inc. 20,000 20,000
27 Maligaya Co. 30,000 30,000
100,000 10,000 110,000
(11) (60

PURCHASE JOURNAL Page 1

Date Purchased From Purchase Cash Purchase Accounts Payable
Dr. Dr. Cr.
2011
Nov. 6 Ruby Co. 60,000 60,000
8 Rosa Co. 100,000 100,000
10 Cash 40,000 40,000
200,000 40,000 160,000
(70) (40)

CASH RECEIPTS JOURNAL Page 1

Date Received from Cash Sales Accounts Cash Sundry
Discounts Receivable Sales Accounts
Dr. Dr. Cr. Cr. Cr.
2011
Nov. 2 Fred 250,000 Fred, Capital (50) 250,000
11 Cash 10,000 10,000
12 Rubic, Inc. 5,000 5,000
20 Rubic, Inc. 43,120 880 44,000
308,120 880 49,000 10,000 250,000
(10) (62) (11) (/) (/)

CASH PAYMENTS JOURNAL Page 1

Date Paid to Accounts Cash Purchase Sundry PR
Payable Purchases Discount Cash Account
Dr. Dr. Cr. Cr. Dr.
2011
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151
Nov. 3 Pacific Office Machines 50,000 Equipment (22) 50,000
5 AC Realtors 30,000 30,000
9 National Book Store 9,900 9,900
10 Cash 40,000 40,000
15 Payroll on Employees 15,000 Salaries (80) 15,000
16 Ruby Co. 58,000 580 57,420
97,900 40,000 580 202,320 65,000
(40) (/) (72) (10) (/)

GENERAL JOURNAL Page 1

Date Description PR Dr. Cr.
2011
Nov. 4 Supplies 10,000
Accounts Payable – National Book Store 10,000
Purchased supplies on account.
5 Land 200,000
Building 300,000
Accounts Payable – AC Realtors 500,000
Purchased land and building.
7 Accounts Payable – Ruby Co. 2,000
Purchase Returns and Allowances 2,000
Returned defective merchandise.
9 Accounts Payable – National Book Store 100
Supplies 100
Discount granted on supplies purchased.
13 Sales Returns and Allowances 1,000
Accounts Receivable – Rubic, Inc. 1,000
Received defective merchandise.

POSTINGS TO SUBSIDIARY LEDGER

ACCOUNTS RECEIVABLE LEDGER (CUSTOMER’S SUBSIDIARY LEDGER)

CARIÑOSA, INC.
Date Items PR Dr. Cr. Balance
2011
Nov 21 2/10, n/60 SJ-1 20,000 20,000

MALIGAYA CO.
Date Items PR Dr. Cr. Balance
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152
2011
Nov. 27 1/10, n/60 SJ-1 30,000 30,000

RUBIC, INC.
Date Items PR Dr. Cr. Balance
2011
Nov. 12 Balance 2/10, n/60 SJ-1 50,000 50,000
12 10% Downpayment CR-1 5,000 45,000
13 Damaged merchandise GJ-1 1,000 44,000
20 Full payment CR-1 44,000

ACCOUNTS PAYABLE LEDGER (CREDITORS’ SUBSIDIARY LEDGER)

AC REALTORS
Date Items PR Dr. Cr. Balance
2011
Nov. 5 On account GJ-1 500,000 500,000
9 Down payment CP-1 30,000 470,000

NATIONAL BOOK STORE

Date Items PR Dr. Cr. Balance
2011
Nov. 4 1/5, n/30 GJ-1 10,000 10,000
9 Full payment of Accounts CP-1 9,900 100
9 Discount allowed GJ-1 100

ROSA CO.
Date Items PR Dr. Cr. Balance
2011
Nov. 8 1/10, n/60 PJ-1 100,000 100,000

RUBY CO.
Date Items PR Dr. Cr. Balance
2011
Nov. 6 1/10, n/60 PJ-1 60,000 60,000
7 Defective Merchandise GJ-1 2,000 58,000
16 Full settlement CP-1 58,000

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153
 POSTINGS TO GENERAL LEDGER USING T-ACCOUNTS

CASH 10
11/30/11 308,120 11/30/11 202,320
105,800

ACCOUNTS RECEIVABLE 11
11/10/11 100,000 11/13/11 1,000
11/30/11 49,000
50,000

SUPPLIES 15
11/4/11 10,000 11/9/11 100
9,900

LAND 20
11/5/11 200,000

BUILDING 21
11/5/11 300,000

EQUIPMENT 22
11/3/11 50,000

ACCOUNTS PAYABLE 40
11/07/11 2,000 11/04/11 10,000
11/09/11 100 11/05/11 500,000
11/30/11 97,900 11/30/11 160,000
570,000

FRED, CAPITAL 50
11/02/11 250,000

SALES 60
11/30/11 110,000

SALES RETURNS AND ALLOWANCES 61

11/13/11 1,000

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154
 SALES DISCOUNTS 62
11/30/11 880

PURCHASES 70
11/30/11 200,000

PURCHASE RETURNS AND ALLOWANCES 71

11/07/11 2,000

PURCHASE DISCOUNTS 72
11/30/11 580

SALARIES 80
11/15/11 15,000

On the basis of our subsidiary ledgers, we can now prepare a schedule of accounts
receivable and accounts payable, the total of which must be in agreement with
controlling account balances.
Name of Company
Schedule of Accounts Receivable
November 30, 2011

Cariñosa, Inc P 20,000

Maligaya Co. 30,000
Total P 50,000

The total is an agreement with the controlling account in the general ledger. See T-
account for Accounts Receivable.

Name of Company
Schedule of Accounts Receivable
November 30, 2011

AC Realtor P 470,000
Rosa Co. 100,000
Total P 570,000

The total is an agreement with the controlling account in the general ledger. See the
Accounting 1 – Principles of Accounting
155
T-account for Accounts Payable.
On the basis of the T-account, we now prepare the trial balance.
Name of Company
Trial Balance
November 30, 2011

Cash P 105,800
Accounts Receivable 50,000
Supplies 9,900
Land 200,000
Building 300,000
Equipment 50,000
Accounts Payable P 570,000
Fred, Capital 250,000
Sales 110,000
Sales Returns and Allowances 1,000
Sales Discounts 880
Purchases 200,000
Purchase Returns and Allowances 2,000
Purchase Discount 580
Salaries Expense 15,000
P 932,580 P 932,580

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156
Accounting 1
Module VI, Lesson 2
SELF-PROGRESS CHECK TEST

I. Modified True or False.

On the blank before each number, write True if the statement is correct; if it is False,
change the underlined word/s to make the statement correct.

_____ 1. A purchase journal is to be used for sale of merchandise.

_____ 2. Special journals are journals that record transactions of the same nature.
_____ 3. Totals in the subsidiary ledger must always be in agreement with the
balances of the controlling account.
_____ 4. The items entered in the cash column of cash receipts journal does not
come only from cash sales.
_____ 5. The design of special journal is uniform in all types of industry.

II.
1. Record the transaction below in sales and cash receipts journal.
2. Balance and rule the journals.
3. Set up subsidiary ledger accounts for customers and post appropriate amounts from
the journals to the subsidiary ledgers.
4. Set up T-accounts for Cash (10), Accounts Receivable (11), Galvez, Capital (30),
Sales (40), and Sales Discount (41). Make necessary postings from the journals to
those T-accounts.
5. Prepare a schedule of accounts receivable as of June 30.

Galvez Appliance Company started business on June 1. Following are transactions

relating to sales and cash receipts during June.
Transactions:
2011
June 1 Galvez invested P 100,000 in her business named Galvez Appliance
Company.
3 Sold an appliance on account to Luningning with a list price of P 10,000.
TERMS 10-5, 1/10, n/60.
5 Sold an appliance on account to Aguinaldo, P 7,500. TERMS 1/15, n/60.
8 Sold an appliance on account to Dimarukot Company for P 50,000 with
30% down payment, balance on credit terms of 2/10, n/60.
9 Sold appliances for cash, P 25,000.
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157
 11 Collected P 3,000 from Luningning to apply to her account.
13 Sold appliances on account to Dimaculangan, P 10,000. TERMS 2/10;
1/15, n/60.
15 Sold appliances to Bulaklak for cash, P 5,000.
18 Sold an appliance on account to Maruja, P 8,000.
20 Collected in full the account of Aguinaldo.
25 Received P 12,000 cash from Dimarukot Company to apply to its account.
28 Collected P 6,000 from Dimaculangan to apply to account.

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158
Accounting 1
Module VI
ANSWER KEYS TO THE SELF-PROGRESS CHECK TESTS

LESSON 1

I.
1. d 2. c 3. c 4. d 5. b
II.
1. Cash Receipts Journal Journal only)
2. Cash Payments Journal 7. Purchase Journal and Cash Payments
3. Cash Payments Journal Journal (Alternative: Cash Payments
4. General Journal Journal only)
5. General Journal 8. Cash Payments Journal
6. Sales Journal and Cash Receipts 9. Cash Receipts Journal
Journal (Alternative: Cash Receipts 10. Cash Payments Journal

LESSON 2

I.
1. Sales Journal 4. True
2. True 5. different/dependent on the needs of the
3. True business enterprise
II.
Requirements Nos. 1 and 2.
SALES JOURNAL Page 1
Date Sold to Accounts Cash Sales
Receivable Sales
Dr. Dr. Cr.
2011
June 3 Luningning P 8,550 P 8,550
5 Aguinaldo 7,500 7,500
8 Dimarukot Co. 50,000 50,000
9 Cash P 25,000 25,000
13 Dimaculangan 10,000 10,000
15 Cash 5,000 5,000
18 Maruja 8,000 8,000
P 84,050 P 30,000 P 114,050
(1) (/) (40)
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159
CASH RECEIPTS JOURNAL Page 1
Date Received Cash Sales Accounts Cash Sundry Post.
From Discount Receivable Sales Accounts Ref.
Dr. Dr. Cr. Cr. Cr.
2011
June 1 Galvez 100,00 Galvez, Capital (30) 100,00
8 Dimarukot Co. 15,000 15,000
9 Cash 25,000 25,000
11 Luningning 3,000 3,000
15 Bulaklak 5,000 5,000
20 Aguinaldo 7,425 75 7,500
25 Dimarukot Co. 12,000 12,000
28 Dimaculangan 6,000 6,000
173,425 75 43,500 30,000 100,000
(10) (41) (11) (/) (/)

Requirement No. 3
CUSTOMERS’ SUBSIDIARY LEDGER

Aguinaldo

Date Items PR Dr. Cr. Balance

2011
June 5 1/5, n/30 SJ-1 7,500 7,500
20 Full payment 7,500 –––

Dimaculangan

Date Items PR Dr. Cr. Balance

2011
June 13 2/10, n/60 SJ-1 10,000 10,000
28 Partial Payment CR-1 6,000 4,000

Dimarukot Company

Date Items PR Dr. Cr. Balance

2011
June 8 2/10, n/60 SJ-1 50,000 50,000
8 30% down payment CR-1 15,000 35,000
25 Partial payment CR-1 12,000 23,000

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160
Luningning

Date Items PR Dr. Cr. Balance

2011
June 3 1/10, n/60 SJ-1 8,550 8,550
11 Partial payment CR-1 3,000 5,550

Maruja

Date Items PR Dr. Cr. Balance

2011
June 8 On account SJ-1 8,000 8,000

Requirement No. 4
CASH 10
6/30/11 173,425

ACCOUNTS RECEIVABLE 11
6/30/11 84,050 6/30/11 43,500
40,550

GALVEZ, CAPITAL 30
6/01/11 100,000

SALES 30
6/30/11 114,050

SALES DISCOUNT 30
6/30/11 75

Requirement No. 5
Galvez Company
Schedule of Accounts Receivable
June 30, 2011

Dimaculangan P 4,000
Dimarukot 23,000
Luningning 5,550
Maruja 8,000
P 40,050
The total of the Schedule of Accounts Receivable is in agreement with the balance of
Accounts Receivable Control Account.

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161