7 - Accounting Information Systems #2

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6 Terms

1
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What does a sales journal record?

records sales of inventory on credit

2
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What does cash receipts journal record?

records sales of inventory ON CASH

3
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Where are sales of non-inventory assets on credit recorded?

In the general journal, since it is used for transactions not covered by special journals, as well as adjusting, closing, and correcting entries

4
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Describe the sales journal

  • Each sale on credit is recorded separately in a sales journal

  • Information about each sale is taken from the sales receipt or invoice

  • It has columns for recording the date, customer's name, invoice number, posting reference, and the sales and cost amounts of each credit sale

  • Totals are posted at the end of the period to GL accounts

  • Customer accounts are in a subsidiary ledger and the financial statement accounts are in the GL

  • One column is used to A/R Dr. & Sales Cr, and another for COGS Dr. & Inventory Cr.

<ul><li><p>Each sale on credit is recorded separately in a sales journal </p></li><li><p>Information about each sale is taken from the sales receipt or invoice</p></li><li><p>It has columns for recording the date, customer's name, invoice number, posting reference, and the sales and cost amounts of each credit sale</p></li><li><p>Totals are posted at the end of the period to GL accounts</p></li><li><p>Customer accounts are in a subsidiary ledger and the financial statement accounts are in the GL</p></li><li><p>One column is used to A/R Dr. &amp; Sales Cr, and another for COGS Dr. &amp; Inventory Cr.</p></li></ul><p></p>
5
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What types of posting occur for a sales journal

  • Posting to the subsidiary ledger(s)

    • Transactions in the SALES journal are posted to customer accounts in the A/R ledger to keep customer accounts up to date

    • When sales recorded in the sales journal are individually posted to customer accounts in the A/R ledger, check marks are entered in the sales journal’s PR column (since accounts are organized alphabetically)

    • THE EQUALITY OF DR. & CR. ARE MAINTAINED IN THE GENERAL LEDGER

  • Posting to the general ledger (GL)

    • The sales journal’s account columns are totaled at the end of each period and posted to respective accounts in the GL.

    • When totals are posted to accounts in the GL, the account numbers are entered below the column total in the sales journal for tracking

      • (eg. 106/413 in the image)

<ul><li><p>Posting to the subsidiary ledger(s)</p><ul><li><p>Transactions in the SALES journal are posted to customer accounts in the A/R ledger to keep customer accounts up to date </p></li><li><p>When sales recorded in the sales journal are individually posted to customer accounts in the A/R ledger, check marks are entered in the sales journal’s PR column (since accounts are organized alphabetically)</p></li><li><p>THE EQUALITY OF DR. &amp; CR. ARE MAINTAINED IN THE GENERAL LEDGER</p></li></ul></li><li><p>Posting to the general ledger (GL)</p><ul><li><p>The sales journal’s account columns are totaled at the end of each period and posted to respective accounts in the GL. </p></li><li><p>When totals are posted to accounts in the GL, the account numbers are entered below the column total in the sales journal for tracking </p><ul><li><p>(eg. 106/413 in the image)</p></li></ul></li></ul></li></ul><p></p>
6
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