...Subsidiary Ledgers and Special Journals The company makes daily postings from the sales journal to the individual accounts receivable to the subsidiary ledger daily (Weygandt, Kimmel, & Kieso, 2008). A subsidiary ledger allows the general journal to have fewer details then needed, with the advantage of providing an up to date balance on specific accounts. Another advantage of the subsidiary ledger is the accounts are listed individually which helps to more easily locate errors. The general ledger account that summarizes subsidiary ledger is called a control account (Weygandt, Kimmel, & Kieso, 2008). The control account, which includes the two ledger accounts; accounts receivable and accounts payable, allows companies to prepare monthly financial statements (Weygandt, Kimmel, & Kieso, 2008). The four special journals that are used in addition to the general journal, include the sales journal, cash receipts journal, purchases journal, and cash payments journal. The sales journal is used to record all sales of merchandise on an account and can be very helpful because you only have to use one line for entries which reduces the chance of errors (Weygandt, Kimmel, & Kieso, 2008). The cash receipts journal is used to record all cash received, such as sales, that take place in the business. A benefit of the cash journal is that you can view weekly or monthly reports of cash flow in the business. The purchases journal is used to record all purchases of merchandise on account, listing each...
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...Subsidiary Ledgers and Special Journals Axia College of University of Phoenix XACC/280 Financial Accounting Concepts and Principles Professor Subsidiary Ledgers and Special Journals * The four special journals are; cash receipt journal, sales journal, purchase journals, and cash payment journal. These journals are used by some businesses as a simple way to record frequently occurring transactions. The sales journal is used to record all sales of merchandise on account. Cash receipt journals are used to record cash receipts transactions. Purchase journals record only purchases of merchandise on account. Cash payment journals are used to record only cash payment transactions. (www.wikipedia.org) * A subsidiary ledger is a set of accounts whose combined balance equals the balance of the corresponding control account in the general ledger. The subsidiary ledgers divide large amounts of financial data into more manageable parts. (www.businessdictionary.com) * A control account is a general ledger account which reflects the balances of its related subsidiary accounts. (Weygant, 2008) * The two general ledger accounts that act as control accounts for a subsidiary ledger are accounts payable and accounts receivable. These accounts act as a crosscheck of the accuracy of the subsidiary accounts. The general ledger will only include the total amount of accounts payable or accounts receivable. The subsidiary ledgers will give you the specifics of each...
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...Subsidiary Ledgers and Special Journals Xacc/280 10/11/12 Lisa Ellis Subsidiary Ledgers and Special Journals Although companies create special journals for other types of repetitive transactions, almost all merchandising companies use special journals for sales, purchases, cash receipts, and cash disbursements. There are a few advantages to using special journals. First, the one line entry for each sales transaction is a time saver. Second, only totals being posted and recorded saves time and reduces the risk of error. The Sales Journal is used to list credit sales; they also list the customer name, date invoice number, date and time. The purchase journal list credit purchases of the merchandise. This journal includes the date of entry, supplier’s name, and transaction amount. The cash journal list transactions that increases cash. The journal will have a separate debit column for discounts given. The cash disbursements journal lists transaction that decreases cash. This journal has one debit column. A subsidiary ledger is an accounting journal this journal gives a more detailed view of items on the general ledger. The most common types of subsidiary ledgers are accounts receivable and accounts payable subsidiary ledgers. A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary. Subsidiary ledgers are subunits of main general ledger accounts. The two most common subsidiaries...
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...Subsidiary Ledgers and Special Journals Tina Freitag Check Point Subsidiary Ledgers Subsidiary ledgers are made up of a number of accounts that are similar. This type of ledger is used to document the combined balances for each ledger account. For example a ledger could include documenting accounts receivable for customers. Subsidiary ledgers have many advantages. It can show a single accounting transaction that affects one customer or one creditor, this is so that in can free the general ledger of to many details, find errors in accounts, and allow for a division of job tasks. The four special journals are sales, cash receipts, purchases, and cash payments. Special journals are designed to expedite journalizing entries and posting. Special journals record similar types of transactions in which, occur most frequently in a business and determines what special journals each company will need. The Sales Journal The sales journal is designed to capture the sale of merchandise or goods on account. Many companies are able to show a sales transaction at both the selling price and buying cost. A one-lined entry saves on posting time, and will reduce the possibility of errors. The best part is that one person or Accountant can handle the responsibilities for the sales journal. The Cash Receipt Journal The Cash Receipt Journal is designed to be able to document business receipts for cash, which also includes debit and credit entries. A Cash Receipt journal saves time by...
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...Subsidiary Ledgers and Special Journals In accounting, every journal has its separate place. There are four special journals in accounting that has special advantage. These journals are sales journal, cash receipts journal, purchases journal, and payments journal. The sales journal secures all transactions that belong to sales for the business. This includes sales of possessions and the service provided by a business. The sales journal produces a thorough image of the history of all sales for the establishment and reveals the activity in a consecutive manner that allows for an easier way to examine the data. The Cash Receipts Journal secures all items that contain a receipt of funds, which includes cash sales for goods and collections of accounts receivables. The sales, Receipts, and Purchases journals decrease the number of items recorded to the General Ledger. The Purchase Journal contains each purchase of goods for an industry. The journal entry debits products or supplies and credits accounts payable for supplier. This journal includes all the debits that are combined for each period for the General Ledger. This allows for the Purchase Journal to act as the sole source of detailed information about purchases. The Cash Payment Journal includes disbursements and also followed by pre-numbered system of checks. This journal also keeps the General Ledger clean and free of untidiness and acts as the only source for the payment made by the...
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...The advantage of special journals is that they save time by making one-line entries possible. Only totals, not individual entries are posted to the general ledger. They free the general ledger of details. They help locate errors in individual accounts. And only one person can concentrate or specialize on sales journal entries, making possible a division of labor. Special journals are needed whenever you need to keep track of similar transactions from multiple sources. To support information in a general ledger control account we will use a subsidiary ledger. A subsidiary ledger is a group of accounts that share a common characteristic (for example, accounts receivable). It is in addition to, and an expansion of, the general ledger(Weygandt, Kimmel, & Kieso., 2008). The purpose of subsidiary ledgers is so you do not have to list every customer’s account in the general ledger, which would take up a lot of space. All the information from the subsidiary ledger is entered as one figure in the general ledger. All the details are found in the subsidiary ledger. To keep a general ledger free of details we will use a control account; which is a summary account in the general ledger. Details of each transaction of a specific type of account(for example a control account could be accounts receivable) would be itemized on the control account and then entered into the general ledger for the time period the general ledger reflects. Entries would be total accounts receivable for that day, week...
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...The advantage of special journals is that they save time by making one-line entries possible. Only totals, not individual entries are posted to the general ledger. They free the general ledger of details. They help locate errors in individual accounts. And only one person can concentrate or specialize on sales journal entries, making possible a division of labor. Special journals are needed whenever you need to keep track of similar transactions from multiple sources. To support information in a general ledger control account we will use a subsidiary ledger. A subsidiary ledger is a group of accounts that share a common characteristic (for example, accounts receivable). It is in addition to, and an expansion of, the general ledger(Weygandt, Kimmel, & Kieso., 2008). The purpose of subsidiary ledgers is so you do not have to list every customer’s account in the general ledger, which would take up a lot of space. All the information from the subsidiary ledger is entered as one figure in the general ledger. All the details are found in the subsidiary ledger. To keep a general ledger free of details we will use a control account; which is a summary account in the general ledger. Details of each transaction of a specific type of account(for example a control account could be accounts receivable) would be itemized on the control account and then entered into the general ledger for the time period the general ledger reflects. Entries would be total accounts receivable for that day, week...
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...The advantage of special journals is that they save time by making one-line entries possible. Only totals, not individual entries are posted to the general ledger. They free the general ledger of details. They help locate errors in individual accounts. And only one person can concentrate or specialize on sales journal entries, making possible a division of labor. Special journals are needed whenever you need to keep track of similar transactions from multiple sources. To support information in a general ledger control account we will use a subsidiary ledger. A subsidiary ledger is a group of accounts that share a common characteristic (for example, accounts receivable). It is in addition to, and an expansion of, the general ledger(Weygandt, Kimmel, & Kieso., 2008). The purpose of subsidiary ledgers is so you do not have to list every customer’s account in the general ledger, which would take up a lot of space. All the information from the subsidiary ledger is entered as one figure in the general ledger. All the details are found in the subsidiary ledger. To keep a general ledger free of details we will use a control account; which is a summary account in the general ledger. Details of each transaction of a specific type of account(for example a control account could be accounts receivable) would be itemized on the control account and then entered into the general ledger for the time period the general ledger reflects. Entries would be total accounts receivable for that day, week...
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...1. Periodically, this department receives a journal voucher from the cash receipts department and an account summary from the accounts receivable department. (a) Cash Receipts Department (c) General Ledger Department (b) Accounts Receivable Department (d) Controller Department 2. Provides a means for verifying that customer checks and remittance advices match in amount. (a) Credit Check (c) Cash Prelist (b) Return Policy (d) Mail Room 3. Sequentially numbered by the printer and allow every transaction to be identified uniquely. (a) Special Journal (c) General Ledger (b) Subsidiary Ledger (d) Prenumbered Source Documents 4. Basis for financial statement preparation. (a) Special Journal (c) General Ledger (b) Subsidiary Ledger (d) Prenumbered Source Documents 5. Used for capturing transaction event details in the revenue cycle. (a) Special Journal (c) General Ledger (b) Subsidiary Ledger (d) Prenumbered Source Documents 6. Prevent and detect unauthorized and illegal access to the firm’s assets. (a) Access Controls (c) Automation (b) Independent Verification (d) Reengineering 7. Its objective is to promote and verify the accuracy and completeness of procedures performed by others in the system. (a) Access Controls (c) Automation (b) Independent Verification (d) Reengineering 8. Using technology to improve efficiency and effectiveness of task. ...
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... | | | Section A DIRECTIONS: Each of the following statements is true or false. Indicate your choice by writing in the Answers column T for a true answer or F for a false answer. (2 points for each correct answer) For Answers Scoring 1. Special journals create less efficient record keeping. _____ _____ 2. When a sales journal is used, there is no need to keep a controlling account for accounts receivable in the general ledger. _____ _____ 3. In special journals, each transaction is usually entered on two lines. _____ _____ 4. Each entry in a special journal must be posted individually to the general ledger. _____ _____ 5. A purchases journal is a special journal used to record cash purchases of merchandise. _____ _____ 6. Sales journals must have separate columns for each account that will be debited or credited. _____ _____ 7. If cash is received from a customer, the customer’s name should be written in the account credited column of the cash receipts journal. _____ _____ 8. The use of special journals saves time because account titles don’t have to be written for most entries. _____ _____...
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...Earnings Subsidiary Ledger in the SUA packet of materials SUA Instructions, Flowcharts and Ledgers location of Cash Receipts Journal in the SUA packet of materials SUA Journals location of General Ledger in the SUA packet of materials SUA Instructions, Flowcharts and Ledgers The reason for not permitting a person who has temporary or permanent custody of an asset to account for that asset is to protect the company against __________________________. fraud. A client's accounting records are unfamiliar to a new auditor. Where would the auditor go to learn the names and numbers of the accounts being debited and credited in the client's transactions? Chart of Accounts Which of the following sequence of steps in the accounting cycle is correct? Prepare documents, record in journals, post to ledgers, and prepare unadjusted trial balance What are the names of Waren's three employees? Ray Kramer, Jim Adams, Nancy Ford The overall objective of the Systems Understanding Aid and this class is to help aid in the understanding and visualization of the entire accounting process How much sales tax applies to wholesale sales according to Illinois state law? No sales tax On January 15, Waren Sports Supply purchased on account $120,000 in from their vendor Velocity Sporting Goods. On February 10 they paid the vendor in full for this purchase. The correct journal entry is ...
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...|Your grading outcome (still in progress) | | |Awarded |Total | |Points (prior to this page) |212 |238 | |Points (on this page) |183 |219 | |Points (after this page) |− |824 | |Total |395 |1,281 | | | Information from previous pages ▪ General instructions ▪ Policies and procedures ▪ All transactions ▪ Adjusting entries information ▪ Trial balance - May ▪ Schedules of accounts - May ▪ Inventory cards - May ▪ Bank reconciliation - May ▪ Bank statement - June ▪ Special printing information ▪ Journals and ledgers instructions ▪ Inventory cards instructions You are now instructed to record transactions that occurred throughout the second week of June into the company's books. The week 2 transactions are listed below: |Week 2 | | |Date |Transaction description | | |11 |Made payment of $1,232 to Integer Energy...
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...INFS7004 Accounting Information Systems Lecture 4 Transaction Cycles: The Revenue Cycle 1 The Conceptual System The Revenue Cycle The revenue cycle is the set of activities in a business which brings about the exchange of goods or services with customers for cash. Most business transactions are conducted on a credit basis. Cash is received after goods are shipped to the customer. 2 Sales Order 1 Credit / Customer Service 2 REVENUE CYCLE (SUBSYSTEM) Cash Receipts/ Collections 6 Shipping 3 Billing/ Accounts Receivable 4/5 Journal Vouchers/Entries: How do we get them? Billing Dept. prepares a journal voucher: Accounts Receivable Sales DR CR Inventory Control Dept. prepares a journal voucher: Cost of Goods Sold Inventory DR CR Cash Receipts Dept. prepares a journal voucher: Cash Accounts Receivable DR CR 4 Sales Order Procedures Sales order procedures include the task involved in receiving and processing a customer order, filling the order and shipping products to the customer at the proper time, and correctly accounting for transaction. 5 Receive Order At this point, sale process begins indicating the type and quantity of merchandise desired by customer. It may or may not be a physical document Orders may arrive by mail, by telephone, or from a field representative who visited the customer After creating the sales order, a copy of it is placed in the customer open order file. 6 Check Credit For...
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...(Recording) Posting to Ledger (Classifying) Final Account (Summarizing) Now Explain Steps:1 Recording:- This is the basic function of accounting. All business transaction, as evidenced by some documents such as Sale bill, Pass book, Salary Slip ect are recorded in the books of account. This is called recording process. 2. Classifying:- All entries in the Journal or books of Original Entry should be posted to the appropriate ledger accounts to find out at a glance the total effect of all such transactions in a particular account. 3. Summarizing:- It is concerned with the preparation and presentation of the classified data in a manner useful to the Internal a well as the external users of financial statements. This process leads to the preparation of the following financial statements:a) Trial Balance b) Profit & Loss Account c) Balance Sheet d) Cash flow Statement. DIFF. BETWEEN BOOK KEEPING AND ACCOUNTING BOOK KEEPING ACCOUNTING 1. It is a Process concerned with recording of transaction. 2. It is the basic of accounting. 1. It is a process concerned with Summarizing of the recorded transaction. 2. It is the basic for business language. for accounting are 3. Person responsible for book-keeping are called book keeper. 4. It does not required any special skill or Knowledge. 5. Personal judgment of the book-keeper is not required. 6. Financial statement are not prepared from 3. Personal responsible called accountant. 4. It required special Skill & knowledge. ...
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...Accg100 Accounting 1A Lecture Notes Semester 2, 2012 1 Table of Contents Lecture Notes Week 1: Introduction to Accounting, Ethics, Business Entities, Financial Statements Week 2: Accounting for Transactions –Part 1 Week 3: Accounting for Transactions –Part 2 Week 4: Accounting for Adjustments- Part 1 Week 5: Accounting for Adjustments- Part 2 Week 6: Completion of Accounting Cycle Accounting Systems Revision Chapters 1 – 4 Week 8: Accounting for Retailers Week 9: Accounting for Inventories Week 10: Non-Current Assets Week 11: Cash Management and Control Week 12: Accounting for Receivables Week 13: Revision Tutorial Exercises Terminology Page 3 14 27 42 53 64 70 80 86 97 111 123 134 149 150 168 2 Lecture Notes Week 1 Introduction to Accounting, Ethics, Business Entities, Financial Statements Required Readings: HEM : Chapters 1 and 2 All required readings m ust be com pleted before attending class 3 What is Accounting? The process of ________________________________and ___________ economic information to assist users to make _____________. Users of Accounting Information The users are internal and external decision makers. Internal: External: Management Accounting Providing information to management to help them ____, ______ and ____________. Users are ________. Financial Accounting Reporting information to ________users to help them make decisions about the entity’s __________ and ____________. The reports produced for the external users...
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