Exam 25: Accounting With Special Journals

Special journals are designed in a manner that is best suited for each business,so good systems design for a business could include collapsing the sales and cash receipts journal into one journal.

The five fundamental principles of accounting information systems are:

A customer who had purchased $25,000 worth of merchandise on account returns 20% of this order to the seller because he is not satisfied with the quality of the goods.How would this entry be recorded on the books of the seller if historically the seller has had very few returns of this nature?

Auditors rely on accounting system databases when they audit financial statements and a company's controls.

Account balances in the general ledger and the subsidiary ledgers should be proved for accuracy after posting is complete.

The purchases journal is used for recording:

The five basic principles of accounting information systems are control,competency,compatibility,flexibility,and cost-benefit.

Match the following terms with the appropriate definitions: A. Cash recerpts journal B. Compatibility principle C. Cost-benefit principle D. Purchases journal E. Sales journal F. Segment margin G. Information storage H. Special journal I. Controlling account J. Schedule of accounts receivable $\underline{\quad\quad\quad\quad\quad}$ 1. A measure of the profitability of a segment, calculated as segment operating income divided by segment average assets. $\underline{\quad\quad\quad\quad\quad}$ 2. Any journal used for recording and posting transactions of a similas $\underline{\quad\quad\quad\quad\quad}$ 3. The special journal that is used to record all receipts of cash. $\underline{\quad\quad\quad\quad\quad}$ 4. An information system principle requiring that the benefits from an activity in an accounting information system outweigh the costs of that activity. $\underline{\quad\quad\quad\quad\quad}$ 5. The component of an accounting system that keeps data in a form accessible to information processors. $\underline{\quad\quad\quad\quad\quad}$ 6. A journal used to record sales of merchandise on credit. $\underline{\quad\quad\quad\quad\quad}$ 7. A general ledger account, the balance of which (after posting) equals the sum of the balances of the accounts in a related subsidiary ledger $\underline{\quad\quad\quad\quad\quad}$ 8. An information system principle requiring that an accounting information system conform with a company's activities, personnel and structure. $\underline{\quad\quad\quad\quad\quad}$ 9. A journal used to record all purchases on credit $\underline{\quad\quad\quad\quad\quad}$ 10. A list of each customer from the accounts receivable ledger with their balances and the total

Two common subsidiary ledgers are cash receipts and cash disbursements.

Internal controls include policies to direct operations toward common goals,procedures to ensure reliable financial reports,safeguards to protect company assets,and methods to achieve compliance with laws and regulations.

A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

A company uses a cash receipts journal (periodic system)as shown below: Accounts Other Account Sales Receivable Accounts Date Credited Explanation Cash Dr. Disc. Dr Cr. Sales Cr. Cr. How would the following transactions be recorded in this cash receipts journal? 12/10 Sold merchandise to Cat Company for $7,500 cash (cost is $4,250) 12/11 Sold merchandise on credit to Dog,Inc,Invoice No.852,for $4,000 (cost is $2,200)Terms are 2/10,n/30.

Enterprise resource planning software:

The sales journal is used for recording:

A __________________ is an all-purpose journal that can record any transaction.

Argyle Company uses a cash receipts journal (periodic system)as shown below: Accounts Other Account Sales Receivable Accounts Date Credited Explanation Cash Dr. Disc. Dr Cr. Sales Cr. Cr. How would the following transactions be recorded in this cash receipt journal? $\bullet$ 12/10 Sold merchandise to Sock Company for $9,260 cash (cost is $5,556) $\bullet$ 12/11 Sold merchandise on credit to Gardner,Inc,invoice no.873,for $7,000 (cost is $4,200).Terms are 2/10,n/30.

The Woodview Company uses a sales journal,purchases journal,cash receipts journal,cash disbursements journal,and general journal.They use the perpetual method.The following transactions occurred during the current month of December: Dec. 4 Sold merchandise on credit for \ 3,300 to the A\&B Co., invoice no. 313. The cost of the goods sold is \ 2,145 . 8 Purchased merchandise on credit for \ 1,800 from the Dexter Co., temms 2/10, n /30 Invoice dated December 8. 10 Sold merchandise for \ 500 cash to RAC Corp., invoice no. 314. The cost of the goods sold is \ 320 13 Collected \ 3,300 cash from the A\&B Co. for merchandise sold on December 4. 17 Paid amount owed to Dexter Co. from December 8 purchase, check no. 1011. 24 Sold merchandise on credit for \ 4,500 to Dunn Corp., invoice no. 315 . The cost of goods sold is \ 2,925 . 27 Paid \ 400 cash for monthly rent to Dayton Properties, check no. 1012 . 31 Purchased equipment for \ 3,055 from Fort Corp., check no. 1013 . Record the above transactions into the appropriate journals shown below: $\mathbf{Sales~ Journal}$ $\mathbf{Page ~15}$ Account Invoice Accounts Receivable Cost of Goods Sold Dr: Date Debited Number / / Inventory $\mathbf{Purchases~ Journal}$ $\mathbf{Page ~20}$ Office Other Date of Accounts Inventory Supplies Accounts Date Account Invoice Payable Cr. Dr. Dr. Dr. $\mathbf{Sales~ Journal}$ $\mathbf{Page ~15}$ Cost of Goods Sales Accounts Other Sold Dr. Account Cash Discount Discount Sales Accounts Inventory Date Credited Explanation Dr. Dr. Dr. Cr. Dr. Cr. \begin{array}{ll} \text {Cash Disbursements Journal }\\ \text{Page 22}\\ \begin{array} { | l | l | l | l | l | l | l | l | l | } \hline && & &&&& \text{Other }&\text{Accounts}\\ & \text{Ck.} && \text{Account}&&& \text{Inventory}& \text{Accounts}&\text{Payable}\\ \text{Date} &\text{No.} & \text{Payee} & \text{Debited} &\text{PR} & \text{Cash Cr}. &\text{Cr.}&\text{Dr.} & \text{Dr.}\\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline \end{array} \end{array}\\

A company uses a sales journal,purchases journal,cash receipts journal,cash disbursements journal,and general journal.A perpetual inventory system is used.The following transactions were completed by the company during the current month of October: Oct. 3 Sold merchandise for \ 6,000 to the South Corp. on credit, invoice no. 1122 . Cost of the goods sold is \ 3,900 . 6 Sold a piece of land for \ 30,000 cash. The land was originally purchased for \ 30,000 11 Purchased supplies from Office Helpers for \ 420 cash. Check no. 2795. 15 Issued a credit memo for \ 550 to West Corp. for returned merchandise. Cost of the goods returned is \ 369. 21 Returned \ 330 of merchandise purchased from Min Corp. for credit on account. 24 Paid cash to Management Inc for monthly rent of \ 5.400 Check no. 2796 31 Recorded depreciation on equipment of \ 12,000 . Record these transactions in the appropriate journal shown below: Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Cost of Goods Sold Dr. Inventory Cr. Purchases Journal Date Account Date of Invoice Terms PR Accounts Payable Cr. Inventory Dr. Office Supplies Dr. Other Accounts Dr \begin{array}{ll} \text { Cash Receipts Journal }\\ \begin{array} { | l | l | l | l | l | l | l | l | l | l|} \hline&&&&&&&&&\text{Cost of}\\ &&&&&&&&&\text{Goods}\\ && & &&\text{Sales}&\text {Accounts }&&\text { Other }&\text{Sold Dr.}\\ & \text{Account} && &\text{Cash}& \text{Discount}& \text{Receivable}&\text{Sales}&\text{Accounts}&\text{Inventory}\\ \text{Date} &\text{Credited} & \text { Explanation } & \text{PR} &\text{Dr.} & \text{Dr.}&\text{Cr.}&\text{Cr.} & \text{Cr.}& \text{Cr.}\\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline & & & & & & & & \\ \hline \end{array} \end{array}\\ Date Ck. No. Payee Account Debited PR Cash Cr. Inventory Cr. Other Accounts Dr. Accounts Payable Dr. General Journal

A procedure called direct posting of sales invoices can substitute for the special sales journal.

Individual transactions in the sales journal are regularly posted to customer accounts in the accounts payable ledger.