Describe and Explain the Purpose of Special Journals and Their Importance to Stakeholders ACCT&202 working

All cash sales are recorded in another special journal known as cash receipts journal. Entering transactions in the general journal and posting them to the correct general https://www.bookstime.com/articles/posting-in-accounting ledger accounts is time consuming. In the general journal, a simple transaction requires three lines—two to list the accounts and one to describe the transaction.

• When you proceed with the update, all invoices entered are cleared from
  the data entry fields and are not available for invoice printing.
• The GST is added to the product price — upon rendering payment, the customer is paying for the product and/or service plus the cost of GST.
• Entries in the Other column are posted individually to the general ledger accounts affected, and the account numbers are placed in the cash disbursements journal’s reference column.
• Each entry increases (debits) purchases and increases (credits) accounts payable.

Of course, every purchase in the journal below must credit accounts payable; equipment purchased with a note payable or supplies purchased with cash would not be recorded in this journal. Individual entries are still posted daily to the accounts payable subsidiary ledger accounts, and each column total is posted at the end of the accounting period to the appropriate general ledger account. It differs from the cash receipts journal in that the latter will serve to book sales when cash is received.[1]
The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales. Notice that only credit sales of inventory and merchandise items are recorded in the sales journal.

Cash Receipts Journal

Just like the purchases journal, only credit sales are recorded when preparing a sales journal. On the other hand, assets sold in cash are recorded in the cash book and the sales of assets on credit are recorded in the proper journal. Entries from the sales journal are posted to the accounts receivable subsidiary ledger and general ledger. Instead of having just one general journal, companies group transactions of the same kind together and record them in special journals rather than in the general journal. This makes it easier and more efficient to find a specific type of transaction and speeds up the process of posting these transactions.

• After recording the transaction, a debit is made to accounts receivable and a credit is made to the sales account.
• Your end debit balance should equal your end credit balance.
• When you have completed the analysis, you must total each column and make sure that you “balance”, that is the sum of the total column must be equal to the total of the all account columns.
• Review the Sales Journal and use it to balance your
  invoice entries.

A copy of the sale invoice is also generated and handed down to the customer. The identification number mentioned in the invoice allows helping track down that particular sale. You can see how these journal entries (using the perpetual inventory method) would be recorded in the general ledger as by clicking fooz ball town to save space. Let’s say your customer purchases a table for $500 with cash. There’s a 5% sales tax rate, meaning you receive $25 in sales tax ($500 X 0.05).

Accounting Sales Journal Entry

Many companies use a multi‐column (columnar) sales journal that provides separate columns for specific sales accounts and for sales tax payable. Each line in a multi‐column journal must contain equal debits and credits. For example, the entries in the sales journal to the right appear below in a multi‐column sales journal that tracks hardware sales, plumbing sales, wire sales, and sales tax payable. Individual entries are still posted daily to the accounts receivable subsidiary ledger accounts, and each column total is posted at the end of the accounting period to the appropriate general ledger account.

However, a dishonest person might manipulate accounting records by recording a smaller amount of cash receipts in the control account than is recorded on the subsidiary ledger cards. The ethical accountant must be vigilant to ensure that the ledgers remain balanced and that proper internal controls are in place to ensure the soundness of the accounting system. You will need to post the totals of these columns to the appropriate accounts in the general ledger (which have been marked in yellow). Using your knowledge of the double-entry bookkeeping system, you will need to determine whether you post on the debit or the credit side of the ledger. Five of these postings will be on one side and one on the other side and this must keep the ledger in balance. Similarly, purchase journals are used to record the purchases of a company.

What is the Cash Payment Journal? Example, Journal Entries, and Explained

The transaction must then be posted to each general ledger account. If the transaction affects a control account, the posting must be done twice—once to the subsidiary ledger account and once to the controlling general ledger account. To speed up this process, companies use special journals to record repetitive transactions that affect sales journal the same set of accounts and have a consistent description. Such transactions can be documented on one line in a special journal. Then, instead of separately posting individual entries, each column’s total is posted at the end of the accounting period. Transactions that decrease cash are recorded in the cash disbursements journal.