170 likes | 333 Views
HFT 2401. Chapter 7 Specialized Journals and Subsidiary Ledgers. Specialized Journals. Leads to greater efficiency in a manual system Allows for reduced postings to the general ledger Daily transactions are recorded in the subsidiary ledger and updated periodically Cash Journal
E N D
HFT 2401 Chapter 7 Specialized Journals and Subsidiary Ledgers
Specialized Journals • Leads to greater efficiency in a manual system • Allows for reduced postings to the general ledger • Daily transactions are recorded in the subsidiary ledger and updated periodically • Cash Journal • Payroll Journal
General Ledger and Control Accounts • Control accounts are used for general ledger accounts that have numerous entries. They supply the detail for each account • Accounts Receivable • Accounts Payable • Prepaid Insurance • Prepaid Expenses
Control Accounts • Balances of the control accounts must equal the balance recorded on the general ledger • Accounts Receivable Subsidiary Ledger – balances due from each guest or city ledger (direct bill) account must total & equal the general ledger • Accounts Payable Subsidiary Ledger– amounts due to each supplier must total and equal the amount recorded on the general ledger
Lodging Industry Accounts Receivable - Trade • Guest Ledger – Guests currently in house or house accounts to be settled on a current basis • City Ledger – Departed guests. Have credit terms established. Can be guest or non-guest related.
Specialized Journals • Advantages • Increased efficiency – one line used in the journal • Time saved in posting to general ledger accounts – only column totals are posted to the general ledger, not individual detail
Specialized Journals • Advantages • Improvements to internal controls • Separation of duties in recording transactions • Reduction of errors in general ledger postings as the number of transactions are reduced
Types of Journals Used • Sales journal – S, SJ, or IJ • Cash receipts journal – CR or CJ • Purchases journal – P or PUR • Cash disbursements journal - CD • General journal - GJ
Requirements for Posting • Supporting evidence / Documentation • Posting references column • Amount
Sales Journal • Used for posting all transactions on accounts • May be either cash or charge transactions • Also posted to customers individual subsidiary ledger simultaneously
Cash Receipts Journal • Used to record cash inflows only • Headers to journal would include offset accounts to post credit to: • Accounts Receivable • Sales • Other
Purchases Journal • Used to record all purchases on account • Headers can include different accounts for the type of purchase i.e. – food purchases, beverage purchases, supply purchases
Cash Disbursements Journal • Records all transactions involving the payment of cash • Accounts payable • Petty cash • Payroll • Immediate disbursements
Payroll Journal • Records Payroll Expenses • Salary expense • Deductions • FWT – Income Taxes • FICA / Medicare • State & Local Taxes • Insurance • Other
General Journal • A “catch-all” journal • Used to record transactions that do not fit into a specialized journal
Specialized Journals for Lodging • Front office cash receipts and disbursements journal • Allowance journal • Transfer journal
Homework • Problem 5 • Problem 7 • Problem 9