Step 2 : Journalizing
7. Post-Closing Trial
Balance.
1. Originating
data; for
example, sales
and purchase
Journalize:
related invoices, 2.
cash receipts,
credit and debit cash payments,
memos, etc. sales, purchases,
general, or
combination
journal.
Accounting
Cycle For A
Merchandising
Business
3. Post to Ledger:
general and
subsidiary.
6. Adjusting and
Closing Entries.
5. Financial
Statements:
Classified Balance
Sheet and Income
Statement with Cost
of Goods Sold.
4. Trial Balance
and Worksheet.
• Journalizing is the process of analyzing each source document and
enter the transaction into the appropriate book of original entry used
in a merchandising firm.
• When journalizing there are many different types of journals that can
be used in a merchandising business.
•
•
•
•
•
•
General Journal
Combination/Synoptic Journal
Sale Journal
Purchases Journal
Cash Receipts Journal
Cash Payments Journal
• The general journal is used to record the opening, adjusting,
and closing entries, entries for Sales and Purchases Returns and
Allowances, and other miscellaneous items.
• To journalize the opening entries, you look at the balance sheet.
From there you will journalize them in the following order.
1.
2.
3.
All of your debit accounts
All of your credit accounts
Source document is the balance sheet
GENERAL JOURNAL
Page_1___
GENERAL
DATE
July 1
ACCOUNT TITLE
Cash
Bank Balance
Bicycle
Stereo
Ski Equipment
A/P Phillip
A/P Dad
Overdue Fines
Chris Turner Capital
Balance Sheet
Doc
No.
Post.
Ref.
DEBIT
55.00
215.50
185.00
250.00
100.00
CREDIT
80.00
200.00
12.50
713.00
• You would use the general journal to journalize transactions in the following situations.
• You are returning merchandise that you paid for.
• To complete the journal do the following
1. Write the date
2. Write the account title and vendor name. A diagonal line is placed between
the account title and the vendor name.
• Accounts Payable/LeBlanc Company
3. Place a diagonal line in the post ref column to show that the single debit
amount is posted to two accounts.
4. Write the debit memo in the doc no. columns (Purchases Returns and Allowances
source document will usually be a debit memo)
5. Write the amount in the debit column.
6. Go to the next line and indent, write purchases returns and allowances in the
account title.
7. Write the amount in the credit column on the second line.
November 28. Returned merchandise to Crown Distributing, $252.00,
covering Purchase Invoice No. 80. Debit Memorandum No. 78.
2
5
1
3
4
6
7
• You would use the general journal to journalize transactions in the following situations.
• Customers are returning merchandise that they purchased
March 11. Granted credit to Village Crafts for merchandise returned, $58.50,
plus sales tax, $3.51, from S160; total, $62.01. Credit Memorandum No. 41.
2
4
1
3
5
7
1. Write the date.
2. Write Sales Returns and Allowances.
3. Write CM and the credit memorandum
number.
4. Write the amount of the sales return.
5. Write Sales Tax Payable.
8
6
9
6. Write the sales tax amount.
7. Write the accounts to be credited.
8. Draw a diagonal line in the Post.
Ref. column.
9. Write the total accounts receivable
amount.
• New Century 21 Text
• Page 258 – Working Together and On Your Own 9-4
• Page 287 - Working Together and On Your Own 10-3
• A service business generally has a large number of cash
transactions and a limited number of noncash transactions. Non
cash transactions are those the do not involve either the receipt
or payment of cash. The combination journals that you are used
to seeing in Accounting 10 would not be as accurate as it should
be, as it would require far too many transactions in the general
debit and credit columns.
• To save time and space we will use the expanded combination
journal, which includes special amount columns to record
frequently occurring noncash transactions.
In the Extended Combination Journal special amounts columns are provided to record
frequently occurring transactions related to the purchasing and selling of merchandise. The
columns are arranged to make accurate recording and posting easier. Debit and Credit
Columns for Cash, A/R, and A/P are arranged in pairs.
• Normal Balance for Merchandise
Merchandise
Normal Balance
Increase
Decrease
• Purchasing Merchandise With Cash
Merchandise was purchased for $465.00 cash on March 12th, 2014.
C295
• Purchasing Merchandise on Account
Merchandise was purchased for $385.00 on Account on March
14th, 2014. PI21
Merchandise
$385.00
Accounts Payable
$385.00
*Remember that when you journalize and there is a special column amount for
both totals no account title is needed, instead you put only a  in the account
title column. Also, you put a  if the amount does not need to be posted
individually in your ledger (only when you are suppose to post the special
account totals).
Normal Balance for Sales
Sales
Decrease
Normal Balance for Sales Tax
Payable
Sales Tax Payable
Normal Balance
Increase
Decrease
Normal Balance
Increase
• Sold Merchandise For Cash
• Merchandise was sold for cash $465.00 sales tax was 5% on
March 12th, 2014. T5
Cash
$488.25
Sales
$465.00
Sales Tax Payable
$23.25
• Sold Merchandise on Account
• Merchandise was sold on Account for $485.00 sales tax was
5% on March 14th, 2014 SI12
Accounts Receivable
$509.25
Sales
$485.00
Sales Tax Payable
$24.25
- To prove your cash use the following formula:
Beginning Cash + Cash Received – Cash Paid Out = Cash on Hand
- Ruling the Journal
- To carry forward a total add up each column make sure Dr=CR and single
underline the totals. Place the date of the last transaction in the date column
and the term ‘carried forward’ in the account title. To bring the total
forward on the next page, write the date of the last transaction, put ‘brought
forward’ in the account title and transfer the totals into each column from the
previous page.
- At the end of your journal, total each column, ensure DR=CR single rule
above the totals, and double rule under the totals. Enter the date of the last
transaction and the word ‘totals’ in the account title.
- See page 264 and 265 in the C21 Old Text for more an example
Assignment:
Century 21 Old Text
• Page 255 – 13-M
• Page 269 – 14-M
• Reference Pages – 240-266
Century 21 New Text
• Page 291 10-5
• Sales Journals contains all transactions involving sales of
merchandise on account. The source documents used for this
journal may be sales invoices, credit invoices, and charge sales
slips depending on whether the journal used is a one-column
journal or a columnar sales journal.
• The credit terms and/or invoice number may be recorded as
well as the amount. Separate columns for GST and PST must be
established in a Sales Journal as liability accounts.
November 3. Sold merchandise on account to Village Crafts, $540.00,
plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76.
1
2
3
4
1. Write the date.
2. Write the customer name.
3. Write the sales invoice number.
4. Write the total amount owed by the customer.
5. Write the sales amount.
6. Write the sales tax amount.
5
6
• Read 272 -274
• Page 275 – Questions 1, 2, 3, 4
• Define:
• Customer
• Sales Tax
• Sales Journal
• Complete Working Together 10-1 and On Your Own 10-1
• Purchases Journals contains all transactions involving purchases
of merchandise on account.
• The source documents used for the Purchases Journal are
purchase invoices if using a one-column journal; however, many
businesses keep a multi-column journal to record all acquisitions
on account. The asset accounts would have special columns. The
purchase invoice number may be written into the journal.
November 2. Purchased merchandise on account from Crown
Distributing, $2,039.00. Purchase Invoice No. 83.
2
1
1.
2.
3.
4.
Write the date.
Write the vendor name.
Write the purchase invoice number.
Write the amount of the invoice.
3
4
1
3
4
5
2
1. Rule a single line across
the amount column.
2. Write the date.
3. Write the word Total.
4. Add the amount column.
5. Write the total.
6. Rule double lines across
the amount column.
6
• Page 262 – 9-6
• Page 291 10-5
• Reference Pages - Chapters 9 and 10
• All money received into the business must be carefully controlled
and deposited promptly. Any cash that is received can be
entered into the cash receipts Journal.
pages 276- 277
UPC (Universal
Product Code)
Cash Register
Receipt
Point-of-Sale (POS)
Terminal Receipt
(continued on next slide)
33
LESSON 10-2
page 277
Terminal Summary
Batch Report
(continued from previous slide)
34
LESSON 10-2
page 278
35
LESSON 10-2
page 279
November 4. Recorded cash and credit card sales, $5,460.00, plus
sales tax, $327.60; total, $5,787.60. Terminal Summary 34.
2
1
1.
2.
3.
4.
5.
6.
7.
36
4
3
5
Write the date.
Place a check mark in the Account Title column.
Write the terminal summary document number.
Place a check mark in the Post. Ref. column.
Write the sales amount.
Write the sales tax amount.
Write the cash amount.
LESSON 10-2
6
7
page 280
November 6. Received cash on account from Country Crafters,
$2,162.40, covering S69. Receipt No. 90.
1
1.
2.
3.
4.
5.
37
2
3
4
Write the date.
Write the customer’s name.
Write the receipt number.
Write the credit amount.
Write the debit amount.
LESSON 10-2
5
page 282
November 7. Received cash on account from Cumberland Center,
$1,176.00, covering Sales Invoice No. 74 for $1,200.00, less 2%
discount, $24.00. Receipt No. 91.
1
2
3
1. Write the date.
2. Write the customer’s name.
3. Write the receipt number.
38
4
5
6
4. Write the original invoice amount.
5. Write the amount of sales discount.
6. Write the debit to cash.
LESSON 10-2
page 283
39
LESSON 10-2
• Page 284 On Your Own 10-2
• All money paid from the bank accounts must be carefully
controlled and recorded in the cash payments journal. It is
sometimes called the cash disbursements journal..
page 242
43
LESSON 9-2
page 243
November 2. Paid cash for advertising, $150.00. Check No. 292.
1
1.
2.
3.
4.
5.
44
2
3
4
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
LESSON 9-2
5
page 243
November 5. Paid cash for office supplies, $94.00. Check No. 293.
1
1.
2.
3.
4.
5.
45
2
3
4
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
LESSON 9-2
5
page 244
November 7. Purchased merchandise for cash, $600.00. Check
No. 301.
2
1
1.
2.
3.
4.
5.
46
3
4
Write the date.
Write the account title.
Write the check number.
Write the debit amount.
Write the credit amount.
LESSON 9-2
5
page 245
November 8. Paid cash on account to Gulf Craft Supply, $488.04,
covering Purchase Invoice No. 82 for $498.00, less 2% discount,
$9.96. Check No. 302.
5
1
2
4
3
1.
2.
3.
4.
5.
6.
47
Write the date.
Write the account title of the vendor.
Write the check number.
Write the debit amount.
Write the credit amount.
Write the credit amount.
LESSON 9-2
6
page 246
November 13. Paid cash on account to American Paint, $2,650.00,
covering Purchase Invoice No. 77. Check No. 303.
1
2
4
3
1.
2.
3.
4.
5.
48
Write the date.
Write the vendor account title.
Write the check number.
Write the debit amount.
Write the credit amount.
LESSON 9-2
5
• Page 247 On Your Own 9-2, 9-3