CHAPTER
6
Supplement:
Special-Purpose Journals
Principles of
Accounting
12e
Needles
Powers
Crosson
© human/iStockphoto
Special-Purpose Journals
(slide 1 of 2)
 Special-purpose journals promote efficiency,
economy, and control.
– They greatly reduce the work involved in entering and
posting transactions in the general ledger, since only
the total amounts of the transactions are posted.
– Each journal can be assigned to a different employee,
which helps establish good internal control.
 Most business transactions fall into one of four
categories. Each kind of transaction can be
recorded in a special-purpose journal.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Special-Purpose Journals
(slide 2 of 2)
 The general journal is used to record transactions,
like purchase returns, sales returns, and adjusting
and closing entries, that do not fall into any of
these special categories.
– When transactions are posted from the general journal
to the ledger accounts, the posting abbreviation is J.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Sales Journal
 The sales journal is designed to handle all credit
sales. (Cash sales are recorded in the cash
receipts journal.)
 The sales journal saves time because:
– Only one line is needed to record each transaction. The
credit to Sales is understood.
– No explanations are necessary because the sales
journal records only credit sales.
– Only one amount—the total credit sales—has to be
posted: once as a debit to Accounts Receivable and
once as a credit to Sales.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Controlling Accounts and Subsidiary Ledgers
 A controlling account (or control account) is an
account in the general ledger that maintains the
total of the individual account balances in a
subsidiary ledger.
 A subsidiary ledger is a ledger separate from the
general ledger that contains a group of related
accounts, such as a list of customers (accounts
receivable subsidiary ledger).
– The total of the balances in the group of related
accounts equals the balance in the corresponding
controlling account, such as Accounts Receivable.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Sales Journal Procedure
(slide 1 of 2)
 Using a sales journal involves the following steps:
– Step 1: Enter each sales invoice in the sales journal on a
single line. Record the date, the customer’s name, the
invoice number, and the amount.
– Step 2: At the end of each day, post each individual
sale to the customer’s account in the accounts receivable
subsidiary ledger. Place a check mark (or customer
account number) in the Post. Ref. column of the sales
journal. In the Post. Ref. column of each customer’s
account, place an S and the sales journal page number
to indicate the source of the entry.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Sales Journal Procedure
(slide 2 of 2)
– Step 3: At the end of the month, sum the Amount column
in the sales journal to determine the total credit sales,
and post the total to the general ledger accounts
(Accounts Receivable and Sales). Place the numbers of
the accounts debited and credited beneath the total in
the sales journal to indicate that this step has been
completed. In the general ledger, indicate the source of
the entry in the Post. Ref. column of each account.
– Step 4: Verify the accuracy of the posting by adding
the account balances of the accounts receivable
subsidiary ledger and comparing the total with the
balance of the Accounts Receivable controlling account
in the general ledger.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Sales Taxes
 Many cities and states require retailers to collect
a sales tax from their customers and periodically
remit the total collected to the city or state.
– In this case, an additional column is needed in the sales
journal to record the credit to Sales Taxes Payable on
credit sales.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Purchases Journal
 The Purchases Journal is used to record
purchases on credit.
– It can take the form of either a single-column journal or
a multicolumn journal. In the single-column journal, only
credit purchases of merchandise for resale to customers
are recorded.
– This kind of transaction is recorded with a debit to
Purchases and a credit to Accounts Payable.
– The Accounts Payable account is generally used as a
controlling account.
– A separate account for each supplier is kept in an
accounts payable subsidiary ledger.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Purchases Journal Procedure
(slide 1 of 2)
 The procedure for using the purchases journal is
much like that for using the sales journal:
– Step 1: Enter each purchase invoice in the purchases
journal on a single line. Record the date, the supplier’s
name, the invoice date, the terms (if given), and the
amount.
– Step 2: At the end of each day, post each individual
purchase to the supplier’s account in the accounts
payable subsidiary ledger. Place a check mark in the
Post. Ref. column of the purchases journal. Place a P
and the page number of the purchases journal in the
Post. Ref. column of each supplier’s account.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Purchases Journal Procedure
(slide 2 of 2)
– Step 3: At the end of the month, sum the Amount column
in the purchases journal, and post the total to the
general ledger as a debit to Purchases and a credit to
Accounts Payable. Place the numbers of the accounts
debited and credited beneath the totals in the
purchases journal to show that this step has been
carried out. In the general ledger, indicate the source
of the entry in the Post. Ref. column of each account.
– Step 4: Check the accuracy of the posting by adding
the account balances of the accounts payable
subsidiary ledger and comparing the total with the
balance of the Accounts Payable controlling account in
the general ledger.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Multicolumn Purchases Journal
 The single-column purchases journal can be
expanded to record credit purchases of items
other than merchandise by adding separate debit
columns for other accounts that are used often.
 The individual transactions in the Accounts Payable
column are posted daily to the accounts payable
subsidiary ledger, and the totals of each column in
the purchases journal are posted monthly to the
corresponding general ledger accounts. Entries in
the Other Accounts column are posted individually
to the named accounts.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Cash Receipts Journal
 All transactions involving receipts of cash are
recorded in the cash receipts journal.
– Although all cash receipts require a debit to Cash, they
differ in that they require a variety of credit entries.
Thus, the cash receipts journal must have several
columns.
– The Other Accounts column is used to record credits to
accounts not specifically represented by a column. The
account numbers are entered in the Post. Ref. column,
and the amounts are posted daily to the appropriate
account in the general ledger. The Other Accounts
column totals are not posted at the end of the month.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Cash Receipts Journal
 The cash receipts journal has the following debit
and credit columns:
– Debit columns
 Cash
 Sales Discounts
 Other Accounts—used for transactions that involve debits both
to Cash and to some account other than Sales Discounts
– Credit columns
 Accounts Receivable—used to record collections on account
from customers
 Sales—used to record all cash sales
 Other Accounts—used for any entry that is neither a cash
collection from accounts receivable nor a cash sale
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Cash Receipts
Journal Procedure (slide 1 of 2)
 The procedure for posting the cash receipts journal
follows:
– Step 1: Post the transactions in the Accounts Receivable
column daily to the accounts receivable subsidiary
ledger. Place a check mark in the Post. Ref. column of the
cash receipts journal and CR plus the page number in the
Post. Ref. column of each subsidiary ledger account.
– Step 2: Post the debits/credits in the Other Accounts
columns to the general ledger accounts. Write the
account number in the Post. Ref. column of the cash
receipts journal and CR plus the page number in the Post
Ref. column of the general ledger account.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Cash Receipts
Journal Procedure (slide 2 of 2)
– Step 3: At the end of the month, total the columns in the
cash receipts journal. The sum of the Debits column totals
must equal the sum of the Credits column totals.
– Step 4: Post the Debits column totals to the corresponding
accounts in the general ledger.
– Step 5: Post the Credits column totals to the corresponding
accounts in the general ledger.
– Steps 6-7: Write the account numbers below each column
in the cash receipts journal and CR plus the page number
in the Post. Ref. column of each account in the general
ledger. Place a check mark at the bottom of the Other
Accounts column, which was already posted in Step 2.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Cash Payments Journal
 All transactions involving payments of cash are
recorded in the cash payments journal (or cash
disbursements journal).
 The cash payments journal includes the following
credit and debit columns:
– Credit columns: Cash, Purchases Discounts, Other
Accounts
– Debit columns: Accounts Payable, specific expense
accounts (such as Salary Expense, Advertising Expense,
and Rent Expense), Other Accounts
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Cash Payments
Journal Procedure (slide 1 of 2)
 The procedure for posting the cash payments
journal follows:
– Step 1: Post the transactions in the Accounts Payable
columns daily to the individual accounts in the accounts
payable subsidiary ledger. Place a check mark in the
Post. Ref. column of the cash payments journal.
– Step 2: Post the debits/credits in the Other Accounts
debit/credit columns to the general ledger. Write the
account number in the Post. Ref. column of the cash
payments journal and CP plus the page number in the
Post. Ref. column of each general ledger account.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Summary of the Cash Payments
Journal Procedure (slide 2 of 2)
– Step 3: At the end of the month, the columns are footed
and crossfooted. That is, the sum of the Credits column
totals must equal the sum of the Debits column totals.
– Step 4: At the end of the month, post the column totals
for Cash, Purchases Discounts, Accounts Payable, and
the expense accounts to their respective accounts in the
general ledger. Write the account number below each
column in the cash payments journal and CP plus the
page number in the Post. Ref. column of each general
ledger account. Place a check mark under the total of
each Other Accounts column in the cash payments
journal to indicate that the postings in that column have
been made.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
General Journal
 Adjusting and closing entries, as well as
transactions that do not involve sales, purchases,
cash receipts, or cash payments, are recorded in
the general journal.
 When a debit or credit is made to a controlling
account, the entry must be posted twice, once to
the controlling account and once to the individual
account in the subsidiary ledger.
©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.