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LESSON 10-1

LESSON 10-1. Journalizing Sales on Account Using a Sales Journal. Original created by M.C. McLaughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School. JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNAL.

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LESSON 10-1

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  1. LESSON 10-1 Journalizing Sales on Account Using a Sales Journal Original created by M.C. McLaughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School

  2. JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNAL • Purchases & sales of merchandise are the two major activities of a merchandising business • A person or business to whom merchandise or services are sold is called a customer • Laws of most states & some cities require that a tax be collected from customers for each sale made • A tax on a sale of merchandise or services is called a sales tax LESSON 10-1

  3. JOURNALIZING SALES ON ACCOUNT USING A SALES JOURNAL Business must file reports with the proper government unit & pay the amount of sales tax collected. Every business collecting a sales tax needs accurate records of the amount of Total sales & Total sales tax collected

  4. SALES TAX page 270 • The amount of sales tax collected is a business liability until paid to the government agency • The sales tax amount is recorded in a separate liability account titled Sales Tax Payable, which has a normal credit balance LESSON 10-1

  5. SALES OF MERCHANDISE ON ACCOUNT page 271 • A sale of merchandise may be: • On account • For cash • Regardless of when payment is made, the revenue should be recorded at the time of a sale, not on the date cash is received LESSON 10-1

  6. SALES OF MERCHANDISE ON ACCOUNT page 271 • A sale for which cash will received at a later date is known as a sale on account • A sale on account is also referred to as a charge sale • Accounts receivable is an asset account with a normal debit balance LESSON 10-1

  7. SALES JOURNAL page 272 • A special journal used to record only sales of merchandise on account is called a sales journal • The special amount columns in this sales journal are Accounts Receivable (Debit), Sales (Credit), & Sales Tax Payable (Credit) LESSON 10-1

  8. SALES INVOICE page 272 • A form describing the goods or services sold, the quantity, and the price is known as an invoice • An invoice used as a source document for recording a sale on account is known as a sales invoice. It is also known as a sales ticket or sales slip LESSON 10-1

  9. SALE ON ACCOUNT page 273 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 5 6 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. LESSON 10-1

  10. TOTALING, PROVING, AND RULING A SALES JOURNAL page 274 • At the end of each month, businesses total, prove, and rule its sales journal LESSON 10-1

  11. TERMS REVIEW page 275 • customer • sales tax • sales journal LESSON 10-1

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