9 Payments, and Banking Procedures. Cash Receipts, Cash

Transcription

1 9-1

2 McGraw-Hill 2007 The McGraw-Hill Companies, Inc. All rights reserved. Chapter Cash Receipts, Cash 9 Payments, and Banking Procedures Section 1: Cash Receipts Section Objectives 1. Record cash receipts in a cash receipts journal. 2. Account for cash short or over. 3. Post from the cash receipts journal to subsidiary and general ledgers.

3 Cash Transactions 9-3

4 9-4 QUESTION: What is cash? ANSWER: In accounting, cash refers to currency, coins, checks, money orders, and funds on deposit in a bank.

5 Cash Receipts 9-5

6 9-6 The type of cash receipts depends on the nature of the business. Supermarkets receive checks as well as currency and coins. Department stores receive checks in the mail from charge account customers. Wholesalers usually receive cash in the form of checks.

7 Cash Payments 9-7

8 9-8 For safety and convenience, most businesses make payments by check. Sometimes a limited number of transactions are paid with currency and coins.

9 9-9 QUESTION: What is a petty cash fund? ANSWER: A petty cash fund is a specialpurpose fund used to handle payments involving small amounts of money.

10 The Cash Receipts Journal 9-10

11 9-11 QUESTION: What is a cash receipts journal? ANSWER: A cash receipts journal is a special journal used to record and post transactions involving the receipt of cash.

12 Recording Transactions in the Cash Receipts Journal 9-12

13 9-13 Objective 1 Record cash receipts in a cash receipts journal.

14 9-14 The cash receipts journal has separate columns for accounts that are frequently used. CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT Debits to Cash

15 9-15 There are columns for: CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT Credits to Accounts Receivable for payments received on account

16 9-16 There are columns for: CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT Credits to Sales and Sales Tax Payable for cash sales

17 9-17 At the end of the month, the totals of all these columns are posted to the general ledger. CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT

18 9-18 CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT The Other Accounts Credit section includes entries that do not fit into the special columns.

19 9-19 Cash Sales and Sales Taxes Consider the cash sales entries for January 8 in the cash receipts journal for The Style Shop.

20 9-20 DATE DESCRIPTION CASH RECEIPTS JOURNAL PAGE 1 POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT 20-- Jan. 7 Roy Anderson Cash Sales , , The sales tax collected is entered in the Sales Tax Payable Credit column.

21 9-21 CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION ACCOUNTS SALES TAX OTHER ACCOUNTS POST. SALES CASH RECEIVABLE PAYABLE ACCOUNT NAME POST. AMOUNT DEBIT 20-- Jan. 7 Roy Anderson Cash Sales , , The sales is entered in the Sales Credit column.

22 9-22 DATE DESCRIPTION CASH RECEIPTS JOURNAL PAGE 1 POST. ACCOUNTS RECEIVABLE SALES TAX PAYABLE SALES OTHER ACCOUNTS ACCOUNT NAME POST. AMOUNT CASH DEBIT 20-- Jan. 7 Roy Anderson Cash Sales , , The cash received is entered in the Cash Debit column.

23 9-23 CASH RECEIPTS JOURNAL PAGE 1 DATE DESCRIPTION ACCOUNTS SALES TAX OTHER ACCOUNTS POST. SALES CASH RECEIVABLE PAYABLE ACCOUNT NAME POST. AMOUNT DEBIT 20-- Jan. 7 Roy Anderson Cash Sales , , Confirm that total credits equal total debits.

24 9-24 Thank You for using College Accounting, 11th Edition Price Haddock Brock