ACCOUNTING SYSTEM-

SPECIAL JOURNALS

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 Processing Transactions –
Manual System
• Similar transactions are grouped together
and recorded in special journals
– Sales journal (all sales on account)
– Purchases journal (all purchases on account)
– Cash receipts journal
– Cash disbursements journal
– General journal

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 Objective 4

Use the sales journal, the cash receipts

journal, and the accounts receivable ledger

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 Special Journals
• Accounting journals used to record one
specific type of transaction
• Save time
• Save money

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 Special Journals
Transaction Special Journal Posting
Abbreviation
Sales on account Sales journal S
Cash receipts Cash receipts journal CR
Purchases on account Purchases journal P
Cash payments Cash payments CP
journal
All others General journal J

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 Sales Journal
Sales Journal
ACCOUNTS COST OF GOODS
INVOICE POST RECEIVABLE DR. SOLD DR.
DATE NO. ACCOUNT DEBITED REF SALES REVENUE CR. INVENTORY CR.

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 Cash Receipts Journal
Cash Receipts Journal
DEBITS CREDITS
OTHER ACCOUNTS
COST OF GOODS
SALES ACCTS SALES ACCOUNT SOLD DR.
DATE CASH DISC REC REV TITLE PR AMT INVENTORY CR.

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 Subsidiary Ledger
• Provides details on individual balances
– Customers (accounts receivable)
– Suppliers (accounts payable)

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 Control Account
• The general ledger account
• Equals the sum of the individual account
balances in a subsidiary ledger

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ACCOUNT ACCOUNTS RECEIVABLE
BALANCE
JRNL Controlling
DATE
Ja
ITEM REF
S7
DEBIT
1,500
CREDIT DEBIT
1,500
CREDIT
Account
n
Ja Cr3 500 1,000
n
ACCOUNT ST. JOHN’S CAFE
BALANCE
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT
Jan 1 S7 500 500

ACCOUNT MARKET STREET GRILL

BALANCE
Subsidiary
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT Accounts
Jan 8 S7 300 300

ACCOUNT WELLWOOD INN

BALANCE
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT
Jan 5 S7 700 700
Jan 10 CR3 500 200

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 Objective 5

Use the purchase journal, the cash

disbursements journal, and the accounts
payable ledger

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 Purchases Journal
Purchases Journal
CREDITS DEBITS
OTHER ACCOUNTS
ACCOUNT ACCOUNTS ACCOUNT
DATE CREDITED TERMS PR PAYABLE INVENTORY SUPPLIES TITLE PR AMOUNT

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 Cash Payments Journal
Cash Payments Journal
DEBITS CREDITS
CK ACCOUNT OTHER ACCOUNTS
DATE NO DEBITED PR ACCOUNTS PAYABLE INVENTORY CASH

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ACCOUNT ACCOUNTS PAYABLE
BALANCE
JRNL Controlling
DATE
Ja
ITEM REF
P7
DEBIT CREDIT
800
DEBIT CREDIT
800
Account
n
Ja CP3 100 700
n
ACCOUNT FAVER EQUIPMENT COMPANY
BALANCE
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT
Jan 1 P7 500 500

ACCOUNT REAL TECHNOLOGIES

BALANCE
Subsidiary
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT Accounts
Jan 8 P7 100 100

ACCOUNT NOTTINGHAM SALES

BALANCE
DATE ITEM JREF DEBIT CREDIT DEBIT CREDIT
Jan 5 P7 200 200
Jan CP3 100 100
10

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 General Journal
• Used for transactions that do not fit into
any of the special journals including
adjusting and closing entries

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 Balancing the Ledgers
• At the end of the accounting period:
– Total debits and credits of account balances
in the general ledger are equal
– Control account balances are equal to the
sum of the appropriate subsidiary ledger
accounts

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 S7-6
Transactions:
CR a. Cash sale of inventory
CP b. Payment of rent
J c. Depreciation of computer equipment
P d. Purchases of inventory on account
CR e. Collection of accounts receivable
J f. Expiration of prepaid insurance
S g. Sale on account

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 S7-6
Transactions:
CP h. Payment on account
CP i. Cash purchase of inventory
CR j. Collection of dividend revenue
earned on an investment
CP k. Prepayment of insurance
CR l. Borrowing money on a long-term
note payable
P m. Purchase of equipment on account
S n. Cost of goods sold along with a
credit sale

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 P7-34B (March 2)
Sales Journal Page 1
ACCOUNTS COST OF GOODS
INVOICE POST RECEIVABLE DR. SOLD DR.
DATE NO. ACCOUNT DEBITED REF SALES REVENUE CR. INVENTORY CR.

Mar 2 191 L E Wooten 2,350 1,390

L E Wooten

Mar 2 S1 2,350 2,350

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 P7-34B (March 3)
Purchases Journal Page 1
CREDITS DEBITS
OTHER ACCOUNTS
ACCOUNT ACCOUNTS ACCOUNT
DATE CREDITED TERMS PR PAYABLE INVENTORY SUPPLIES TITLE PR AMOUNT
3/10,
Mar 3 Delwood n/60 5,900 5,900

Delwood Plaza

Mar 3 P1 5,900 5,900

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 P7-34B (March 4)
Cash Receipts Journal
DEBITS CREDITS
OTHER ACCOUNTS
COST OF GOODS
SALES ACCTS SALES ACCOUNT SOLD DR.
DATE CASH DISC REC REV TITLE PR AMT INVENTORY CR.

Mar 4 3,410 3,410 1,820

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 P7-34B (March 5)
Cash Payments Journal
DEBITS CREDITS
CK ACCOUNT OTHER ACCOUNTS
DATE NO DEBITED PR ACCOUNTS PAYABLE INVENTORY CASH

Mar 5 473 Furniture 1,080 1,080

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 P7-34B (March 8)
Cash Receipts Journal
DEBITS CREDITS
OTHER ACCOUNTS
COST OF GOODS
SALES ACCTS SALES ACCOUNT SOLD DR.
DATE CASH DISC REC REV TITLE PR AMT INVENTORY CR.

Mar 4 3,410 3,410 1,820

Interest
8 120 Revenue 120

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 P7-34B (March 9)
Sales Journal Page 1
ACCOUNTS COST OF GOODS
INVOICE POST RECEIVABLE DR. SOLD DR.
DATE NO. ACCOUNT DEBITED REF SALES REVENUE CR. INVENTORY CR.

Mar 2 191 L E Wooten 2,350 1,390

9 192 Cortez Co 6,250 3,300
Cortez Co

Mar 9 S1 6,250 6.250

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 P7-34B (March 10)
Cash Payments Journal
DEBITS CREDITS
CK ACCOUNT OTHER ACCOUNTS
DATE NO DEBITED PR ACCOUNTS PAYABLE INVENTORY CASH

Mar 5 473 Furniture 1,080 1,080

10 474 Inventory 770 770

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 P7-34B (March 12)
Cash Receipts Journal
DEBITS CREDITS
OTHER ACCOUNTS
COST OF GOODS
SALES ACCTS SALES ACCOUNT SOLD DR.
DATE CASH DISC REC REV TITLE PR AMT INVENTORY CR.

Mar 4 3,410 3,410 1,820

Interest
8 120 Revenue 120
12 2,303 47 2,350 Wooten
L E Wooten

Mar 2 S1 2,350 2,350

Mar 12 CR1 2,350 -0-
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End of Chapter 7

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