Accounting and Business 17

CASH RECEIPTS JOURNAL – all cash receipts or collection are recorded in this book such as sales of
merchandise in cash, collections from customer’s accounts, etc.

To Illustrate:

Aug. 1, 200A – Sold merchandise for cash to Maya Co. amounting to P65, 000 as per Cash
Invoice No. 5320. VAT is 12%.

CASH RECEIPTS JOURNAL

Cash Cash in Sales Accounts Sales Vat

20 A Payor Invoice/ Bank Discounts Receivabl Output
O.R. # e Tax
Dr. Dr. Cr. Cr. Cr.
Aug. 1 Maya 5320 P72, 800 P65, 000 P7, 800
Company

In a journal entry form, the above transaction is recorded as follows:

Cash in Bank P72, 000

Sales P65, 000

VAT Output Tax P7, 800

To record cash sales of merchandise.

CASH DISBURSEMENTS JOURNAL – All cash payments are recorded in this book such as purchase of
merchandise in cash, payment of expenses and obligations, remittance of SSS Premium and other
government dues, etc.

To Illustrate:

March 1, 20A – Paid an account with Copa Co. P70, 000 as per Invoice No. 0321. This is covered
by Check Voucher No. 02 with Check No. 98761.

CASH DISBURSEMENTS JOURNAL

Check Check Cash VAT Account Sundries

20A Payee Explanatio Vouche No. in Purchase Input s
n r No. Bank s Tax Payable

Cr. Dr. Dr. Dr. Acct Dr. Cr.

.
Mar.1 Copa, Payment of 02 98761 P70, P70, 000
Inc. account 000

In journal entry form, the above transaction is recorded as follows:

Accounts Payable P70, 000

Cash in Bank P70, 000

To record payment of account.

Accounting and Business 17

GENERAL JOURNAL – transactions which could not be recorded in any of the above-mentioned special
journals are recorded in the General Journal. This means that the General Journal is used even there are
special journals. Examples of transaction that cannot be recorded in the special journals and instead in
the general journals are as follows:

a. Purchase of office supplies, property and equipment, etc. on account, other than merchandise.
b. Investment of a proprietor not involving cash.
c. Return of merchandise bought on account.
d. Merchandise returned by a customer which was sold on account.
e. Adjusting, Closing and Revising Entries.

The debit and credit amounts in the general journal are not totaled at the end of the month unlike with
that of the special journals.

Posting (2nd step) – the entries in the journal are transferred to the book of final entry called “Ledger”.
The process of transferring entries from the Journal to the Ledger is called POSTING which is the second
step of the accounting cycle.

Each account title in the Chart of Accounts is provided with a page of a ledger. Thus, a ledger is called
“group if accounts”. The skeleton form of a ledger is called “T- Accounts”. It is called as such because it
resembles a capital letter “T”.

The amount of the account debited in the journal entry is posted to the left-hand side of the said
account. The amount is called the “debit entry”. On the other hand, the amount of the account credited
in the journal entry is posted to the right-hand side of the said account. The amount is called a “credit
entry”.

To Illustrate:

A journal entry is given below:

Cash P5, 000

Accounts Receivable P5, 000

Collections from customer’s accounts.

The above journal entry is posted to their respective General Ledger as follows:

CASH ACCOUNTS RECEIVABLE

Debit entry P5, 000 P5, 000 credit entry

In the case of Special Journals, posting to the ledger is done at the end of the month and is made on a
per total basis.

After posting has been done, we add the amounts of both in the debt and credit sides of the account
and find the balance thereof. This process is called “footing”