1 / 28

Chapter 10

Chapter 10. Objectives: Define accounting terms related to sales and cash receipts for a merchandising business Identify accounting concepts and practices related to sales and cash receipts for a merchandising business Journalize sales on account using a sales journal

mapes
Download Presentation

Chapter 10

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 10 Objectives: • Define accounting terms related to sales and cash receipts for a merchandising business • Identify accounting concepts and practices related to sales and cash receipts for a merchandising business • Journalize sales on account using a sales journal • Journalize cash receipts using a cash receipts journal • Record sales returns and allowances using a general journal LESSON 10-1

  2. Lesson 10-1: Journalizing Sales on Account using a Sales Journal Terms Review: Customer Sales Tax Sales Journal

  3. SALES TAX page 270 Customer—a person or business to whom merchandise or services are sold Sales Tax—a tax on a sale of merchandise or services; sales tax is a percentage of sales paid by customers imposed by most states and some cities; the business is required to collect the sales tax but the amount collected must be submitted to the government agency for which is was collected The amount collected is a liability to the business until paid to the government agency. LESSON 10-1

  4. SALES OF MERCHANDISE ON ACCOUNT page 271 A sale of merchandise may be on account or for cash. A sale of merchandise increases the revenue of a business. Regardless of when payment is made, the revenue should be recorded at the time of a sale, not on the date cash is received. A sale for which cash will be received at a later date is known as a sale on account. A sale on account is also referred to as a charge sale. LESSON 10-1

  5. SALES JOURNAL page 272 Sales journal—a special journal used to record only sales of merchandise on account With these special amount columns, each sale on account transaction can be recorded on one line of the sales journal. LESSON 10-1

  6. SALES INVOICE page 272 A form describing the goods or services sold, the quantity, and the price is known as an invoice. Price of goods X Sales Tax Rate = Sales Tax Price of Goods + Sales Tax = Total Amount LESSON 10-1

  7. 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

  8. TOTALING, PROVING, AND RULING A SALES JOURNAL page 274 A sales journal is totaled, proved, and ruled at the end of the month. LESSON 10-1

  9. Lesson 10-1 Work Together 10-1 and On Your Own 10-1 on textbook page 275. LESSON 10-1

  10. LESSON 10-2: Journalizing Cash Receipts Using a Cash Receipts Journal Terms Review: Cash Sale Credit Card Sale Point-of-Sale (POS) terminal Terminal summary Batch report Batching out Cash Receipts Journal Sales Discount

  11. PROCESSING SALES TRANSACTIONS pages 276- 277 Cash Sale—a sale in which cash is received for the total amount of the sale at the time of the transaction Credit Card Sale—a sale in which a credit card is used for the total amount of the sale at the time of the transaction Point-of-Sale (POS) terminal—a computer used to collect, store, and report all of the information of a sales transaction Terminal Summary—the report that summarizes the cash and credit card sales of a point-of-sale terminal (continued on next slide) LESSON 10-2

  12. Cash Register Receipt UPC (Universal Product Code) Point-of-Sale (POS) Terminal Receipt PROCESSING SALES TRANSACTIONS pages 276- 277 (continued on next slide) LESSON 10-2

  13. Terminal Summary Batch Report PROCESSING SALES TRANSACTIONS page 277 (continued from previous slide) LESSON 10-2

  14. Processing Credit Cards page 277 Batch report—a report of credit card sales produced by a point-of-sale terminal Batching out—the process of preparing a batch report of credit card sales from a point-of-sale terminal Every business has a contract with a bank to process its credit card sales. Most banks deposit credit card sales in their business customer bank accounts in 2-3 days. However, some businesses may receive their cash the next business day. Merchandising businesses pay a percentage of credit card sales as a fee for credit card processing. LESSON 10-2

  15. CASH RECEIPTS JOURNAL page 278 Cash Receipts Journal—a special journal used to record only cash receipt transactions; you will always have something in the cash debit column of the cash receipts journal Sales Discount—a cash discount on sales taken by a customer; a sales discount reduces the amount the customer must pay on account; cash discounts are available only to customers who purchase merchandise on account LESSON 10-2

  16. CASH AND CREDIT CARD SALES 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 4 1 3 5 6 7 1. Write the date. 2. Place a check mark in the Account Title column. 3. Write the terminal summary document number. 4. Place a check mark in the Post. Ref. column. 5. Write the sales amount. 6. Write the sales tax amount. 7. Write the cash amount. LESSON 10-2

  17. CASH RECEIPTS ON ACCOUNT page 280 November 6. Received cash on account from Country Crafters, $2,162.40, covering S69. Receipt No. 90. 1 2 3 4 5 1. Write the date. 2. Write the customer’s name. 3. Write the receipt number. 4. Write the credit amount. 5. Write the debit amount. LESSON 10-2

  18. Calculating Cash Receipts on Account with Sales Discount page 282 Why would a merchandising business offer its customers a sales discount? To encourage early cash receipts Sales Invoice Amount X Sales Discount Rate = Sales Discount The sales discount reduces the amount received from the customer What does the terms of sale 1/10, n/30 mean? You have 30 days to make the payment, but if you make the payment in 10 days you get a 1% discount. LESSON 10-2

  19. JOURNALIZING CASH RECEIPTS ON ACCOUNT WITH SALES DISCOUNTS 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 4 5 6 1. Write the date. 4. Write the original invoice amount. 2. Write the customer’s name. 5. Write the amount of sales discount. 3. Write the receipt number. 6. Write the debit to cash. LESSON 10-2

  20. TOTALING, PROVING, AND RULING A CASH RECEIPTS JOURNAL page 283 A cash receipts journal is totaled, proved, and ruled each time the end of a page is reached and always at the end of the month. LESSON 10-2

  21. Proving Cash at the End of a Month page 283 Cash is proved using amounts from the cash receipts and cash payments journals and the balance shown in the checkbook on the next unused stub. Cash on hand at the beginning of the month (balance of general ledger cash account) Plus total cash received during the month (cash debit column total from cash receipts journal) Equals total Less total cash paid during the month (cash credit column total from cash payments journal) Equals cash balance on hand at the end of the month Equals Checkbook balance on the next unused check stub LESSON 10-2

  22. Lesson 10-2 page 284 Work Together 10-2 and On Your Own 10-2 on textbook page 284 LESSON 10-2

  23. LESSON 10-3: Recording Transactions Using a General Journal Terms Review sales return sales allowance credit memorandum

  24. CREDIT MEMORANDUM FOR SALES RETURNS AND ALLOWANCES page 285 Sales Return—credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor’s accounts receivable Sales Allowance—credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor’s accounts receivable Credit Memorandum—a form prepared by the vendor showing the amount deducted for returns and allowances LESSON 10-3

  25. CREDIT MEMORANDUM FOR SALES RETURNS AND ALLOWANCES page 285 Why does a merchandising business might credit a customer’s account yet allow them to keep the merchandise? The merchandising business must pay for the transportation cost of returning the items. Unless the items returned have value, there is no benefit to offset the transportation costs. LESSON 10-3

  26. 5 JOURNALIZING SALES RETURNS AND ALLOWANCES page 286 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 6 9 8 7 1. Write the date. 6. Write the sales tax amount. 2. Write Sales Returns and Allowances. 7. Write the accounts to be credited. 8. Draw a diagonal line in the Post. Ref. column. 3. Write CM and the credit memorandum number. 9. Write the total accounts receivable amount. 4. Write the amount of the sales return. 5. Write Sales Tax Payable. LESSON 10-3

  27. Lesson 10-3 page 287 Work Together 10-3 and On Your Own 10-3 on textbook page 287 LESSON 10-3

  28. Chapter 10 Problems Application Problem 10-1 Application Problem 10-2 Application Problem 10-3 Mastery Problem 10-4 Challenge Problem 10-5 Ch10 Understanding Source Docs

More Related