Accounting: Lesson 10-2
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Journalizing Cash Receipts Using a Cash Receipts Journal
10.2 Objectives
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Define accounting terms related to cash receipts for a merchandising business
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Journalize cash receipts using a cash receipts journal.
Terms
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Cash Sales
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Credit card sales
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A computer used to collect, store and report all the information of a sales transaction.
Terminal Summary
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A sale in which a credit card is used for the total amount of the sale at the time of the
transaction
Point-of-Sale (POS)Terminal
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A sale in which cash is received for the total amount of the sale at the time of the
transaction
The reports that summarizes the cash and credit card sales of a point-of-sale terminal
Creates a Report of:
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Sales by sales clerk – efficiency
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Sales by time of day – scheduling
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Merchandise having a quantity on hand below a predetermined order point alerts
management to purchase additional merchandise
PROCESSING SALES RRANSACTIONS
PROCESSING SALES TRANSACTIONS
Processing Credit Cards
Cash Receipts Journal – A special journal used to record only cash receipt transactions.
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All cash receipts are recorded in a cash receipts journal
Sales Discount – A cash discount on sales taken by a customer
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Reduces the amount the customer must pay on account
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Cash discounts are available only to customers who purchase merchandise on account
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Gets customers to pay quicker.
1. Write the date in the date column
2. Place a check mark in the Account Title column to show that no account title needs to be
written. The debit and credit amounts will be recorded in special amount columns.
3. Write the terminal summary document number
4. Place a check mark in the Post. Ref. column to show that amounts on this line are not be posted
individually
5. Write the sales amount in the Sales Credit column
6. Write the sales tax amount in the Sales Tax Payable Credit column
7. Write the cash amount in the Cash Debit column
Credit Card Sales are accounted for in the same way as cash sales – banks accept credit card slips the
same way they accept cash.
A cash and credit card sale results in an increase in:
1.
Sales Credited
2. Sales Tax Payable Credited
3. Cash Debited
The only general ledger account titles entered in the Account Title column are for those entries in the
General Debit or General Credit columns.
Terminal Summary is the source document for the transaction
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Batch report
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A report of credit card sales produced by a point of sale terminal.
Batching Out
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The process of preparing a batch report of credit card sales from a point-of-sale terminal
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Most banks deposit credit card sales in their business customer bank accounts in 2/3 days
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CASH RECEIPTS JOURNAL
1. Write the date in the Date column
2. Write the customer's name in the Account Title column
3. Write the receipt number in the Doc. No. column
4. Write the original invoice amount in the Accounts Receivable credit column
5. Write the amount of sales discount in the Sales Discount debit column
6. Write the debit to Cash in the Cash debit column.
Since sales discounts decrease sales the account Sales Discount is a contra account to Sales.
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Cash Discount
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Encourage early cash receipts/payments
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Reduces the amount received from the customer
2/10
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n/30
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When a customer pays the amount owed within 10 days the sales invoice amount is
reduced 2%. Otherwise the net amount is due in 20 days
1/10
Payment is due in 30 days
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1% discount if received in 10 days
n/60
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Payment is due in 60 days
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JOURNALIZING CASH RECEIPTS ON ACCOUNT WITH SALES DISCOUNTS
TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL
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Totaling, Proving, and Ruling a Cash Receipts Journal
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Proving Cash
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Audit Your Understanding
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What is the difference in the receipt received by a customer from a cash register versus a pointof-sale terminal?
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The POS systems produces a receipt that contains detailed information about the sale,
including the merchandise’s description and price. The cash register receipt does not
include such detailed information
What are the two types of batch reports?
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Detailed – showing each credit cared sale
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Summary – of the number and total of sales by credit card type
Who transfers funds between banks involved in the credit card sales?
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The funds are transferred among the banks issuing the credit cards