Accounting Information Systems

1
AGRICULUTURAL TECHNICAL INSTITUTEBUS TEC T101
ACCOUNTING

• Chapter 7

SPECIAL JOURNALS
Part 1
SALES JOURNAL CASH RECEIPTS JOURNAL
2
ACCOUNTING CONCEPTS

• CH 1 ACCT THE BUS ENVIRONMENT
• CH 2 RECORDING TRANSACTIONS
• CH 3 MEASURING INCOME ADJUSTMENTS
• CH 4 COMPLETING THE ACCTING CYCLE
• CH 5 MERCHANDISE OPERATIONS
• CH 6 MERCHANDISE INVENTORY
• CH 7 SPECIAL JOURNALS
• CH 8 CONTROLLING CASH
• CH 9 RECEIVABLES
• CH 10 PLANT ASSETS INTANGIBLES
• CH 11 CURRENT LIABILTIES PAYROLL
• CH 17 CASH FLOW

3
LEARNING OBJECTIVES
CHAPTER 7 SPECIAL JOURNALS

• AFTER COMPLETING THIS LESSON, THE STUDENT SHOULD
  BE ABLE TO

1. Describe an effective accting info system.
2. Use Sales Jrnl, Cash Rec Jrnl, Accts Rec
Sub Ledger
4
Basic Features Of Acct Info System
282
1
Describe an effective accting info sys
OBJ

• Internal controls are the methods and procedures
  used to authorize transactions and safeguard
  assets.
• Compatibility means that the system works
  smoothly with operations, personnel, and the
  organizational structure.

Flexibility relates to the systems ability to
accommodate changes in the organization. A
cost/benefit relationship indicates that the cost
of controls do not exceed their value to the
organization.
5
Components of a Computerized Accounting System
283
Describe an effective accting info sys
1
OBJ
Hardware is the electronic equipment that makes
up a computer system.
Hardware
Software

• Software is the instructions that instruct the
  computer to perform various functions.

Trained personnel are critical to the operations
of the system.
Company Personnel
6
Computerized Accounting System
284
1
Describe an effective accting info sys
OBJ
ACCOUNTING RECORDS
Journals, Ledgers, Other records
PERSONNEL input transactions, request reports,
protect records
posted
accessed for reports
HARDWARE
PROCESSING
OUTPUT
INPUT
printed to paper, screen
entered, edited
SOFTWARE
REPORTS
DATA
7
284
1
Describe an effective accting info sys
OBJ
WHY SPECIAL JOURNALS?
HOW MANY PEOPLE CAN WORK ON THE GENERAL JOURNAL
AT ANY ONE TIME?
JUST ONE
WOULD THIS WORK FOR GM?
SOLUTION ?
BREAK ACCOUNTING TASK INTO PIECES USING SPECIAL
JOURNALS
MULTIPLE PEOPLE CAN WORK ON JOURNALS AT ONE TIME
BUT EACH PERSON DEALS WITH 1 KIND OF TRANASCTION
SPECIALIZATION LEADS TO
EFFICIENCY
HIGHER PRODUCTIVITY
8
Spec Journals in a Perpetual Inv Sys
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
288
2
OBJ

• Special Journals are accounting journals used to
  record one specific type of transaction.

Only for For Merch Sales on Acct
Sales
Db Accts Rec, Cr Sales Revenue
Only for For Purchases on Acct
Purchases
All Transactions that Cr Accts Pay
Cash Receipts
For Cash In for any purpose
All Transactions that Db Cash
Cash Disbursements
Cash Out for any purpose
All Transactions that Cr Cash
9
Transactions Special Journals
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
288
2
OBJ
Merchandise Sold on Acct
Sales
Cash Receipts
Merchandise Sold for Cash
Purchases
Merchandise Purch on Acct
Cash Disbursements
Merchandise Pur for Cash
Payments Received
Cash Receipts
Payments Made
Cash Disbursements
Adj Closing
Gen Journal
10
Sales Journals in a Perpetual Inventory Sys
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
235
2
OBJ
Why
Suppose 400 sales on acct per month
former Method
400 entries of 4 lines each in GJ
ACCT RECEIVABLE- J DOE
SALES REVENUE
COST OF GOODS SOLD
INVENTORY
1600 postings
11
Sales Journals in a Perpetual Inventory Sys
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
235
2
OBJ
Why
Suppose 400 sales on acct per month
New Method 400 entries of 1 line each in SJ
400 postings to individual acts 4
postings to cntrl accts
When
Transactions Recorded in Sales Jrn Daily
Posted to Ind Acct Daily
Totals Posted to Controlling Accts Monthly
12
1.Daily Recording in Sales Journal
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
ATI COMPANY INVOICE 422, Terms 2/10 n 30
Date Nov 2, 2004
TO Galvez
Price
Total
Number
Description
935
1
Refrig- Ser101
935
935
Galvez
422
505
Nov 2
13
Subsidiary Ledger
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
237
2
OBJ

• A subsidiary ledger is often used to provide
  details on individual balances of...customers
  (accts rec) ... suppliers (accounts payable).

A Control Account
A control account is the general ledger master
account. It equals the sum of the individual
account balances in a subsidiary ledger.
14
2. Posting to Acct Rec Sub Ledger
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Find Ind Acct Rec In Acct Rec Subsidiary
Ledger
b Copy Date From Sales Journal To Ind Acct Rec In
Acct Rec Subsidiary Ledger
c. Copy Journal Reference From Sales Journal To
Ind Acct Rec In Acct Rec Subsidiary Ledger
d. Copy Debit Amt From Sales Journal To Ind Acct
Rec In Acct Rec Subsidiary Ledger
e. Add Debits To Previous Bal In Ind Acct Rec
In Acct Rec Subsidiary Ledger To Get Current Bal
f. Put Ck in Post Ref Column of Sales Journal
15
2. Posting to Acct Rec Sub Ledger
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Find Ind Acct Rec In Acct Rec Subsidiary
Ledger
b Copy Date From Sales Journal To Ind Acct Rec In
Acct Rec Subsidiary Ledger
DAILY
c. Copy Journal Reference From Sales Journal To
Ind Acct Rec In Acct Rec Subsidiary Ledger
d. Copy Debit Amt From Sales Journal To Ind Acct
Rec In Acct Rec Subsidiary Ledger
e. Add Debits To Previous Bal In Ind Acct Rec
In Acct Rec Subsidiary Ledger To Get Current Bal
f. Put Ck in Post Ref Column of Sales Journal
16
2. Posting to Acct Rec Sub Ledger
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
?
DAILY
c
b
d
a
Galvez
120-111-11
935
Nov 2
SJ3-422
935
17
3. Posting SJ to Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Post total of Acct Rec In the Sales Journal
as a debit to Acct Rec In Gen Ledger. Write Gen
Ledger Acct No below total to indicate Posting
b. Post total of Sales Rev in the Sales Journal
as a Credit to Sales In Gen Ledger. Foot
X-Foot
c. Post total of COGS In Sales Journal as a
Debit to COGS In Gen Ledger. Foot X-Foot
d. Post total of Inventory In Sales Journal as
a Credit to Inventory In Gen Ledger. Foot X-Foot
18
3. Posting SJ to Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Post total of Acct Rec In the Sales Journal
as a debit to Acct Rec In Gen Ledger. Write Gen
Ledger Acct No below total to indicate Posting
b. Post total of Sales Rev in the Sales Journal
as a Credit to Sales In Gen Ledger. Foot
X-Foot
END OF MONTH
c. Post total of COGS In Sales Journal as a
Debit to COGS In Gen Ledger. Foot X-Foot
d. Post total of Inventory In Sales Journal as
a Credit to Inventory In Gen Ledger. Foot X-Foot
19
3a. Posting SJ to Acct Rec Control Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
112/
Accts Rec
112
EOM
SJ3
4319
4319
20
3b. Posting SJ to Sales Control Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
410
Sales Rev
410
EOM
SJ3
4319
4319
21
3c. Posting SJ to COGS Control Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
410
511
COGS
511
EOM
SJ3
1814
1814
22
3d. Posting SJ to Inventory Control Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
410
511
/131
Inventory
131
1814
EOM
SJ3
1814
23
Cash Receipts Journal
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
238
2
OBJ

• Additional columns are provided to enter other
  account descriptions and amounts.
• Cash receipts amounts affecting subsidiary ledger
  accounts are posted daily to keep customer
  balances up to date.
• At month end, foot and crossfoot the journal and
  post to the general ledger.

24
1.Recording a Cash Sale
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
238
2
OBJ
On Nov 6, 2004 ATI Co. sold 517 worth of
merchandise to a walk-in cash customer. Our
wholesale cost was 400
Former Way-
In General Journal
517
Cash
Nov 6
Sales Revenue
517
400
COGS
INVENTORY
400
25
1.Recording a Cash Sale
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
238
2
OBJ
On Nov 6, 2004 ATI Co. sold 517 worth
ofmerchandise to a walk-in cash customer. Our
wholesale cost was 400
Use Cash Receipts Journal
New Way-
11/6
517
517
400
26
2.Recording a Cash Payment
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
127
2
OBJ
On Nov 11, 2004 Galvez sent a check as payment on
their account within the discount period.
935
Amount Due
- Discount
-35
900
Amount of Check
Former Way
CASH
900
SALES DISCOUNT
35
ACCOUNT REC - GALVEZ
935
27
2.Recording a Cash Payment
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
127
2
OBJ
935
Amount Due
- Discount
-35
900
Amount of Check
NEW WAY
35

• Galvez

11/11
900
935
28
2. Posting to Acct Rec Sub Ledger
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
11/11
CR-5
935
0
29
3. Posting CRJ to Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Post total of Cash In Cash Rec Journal as a
debit to Cash Rec In Gen Ledger. Write Gen
Ledger Acct No below total to indicate Posting
b. Post total of Sales Discount in Cash Rec Jrnl
as a Credit to Sales Discount In Gen Ledger.
Foot X-Foot
c. Post total of Acct Rec In Cash Rec Jrnl as
a Credit to Acct Rec In Gen Ledger. Foot X-Foot
d. Post total of Sales in Cash Rec Jrnl as a
Credit to Sales Revenue In Gen Ledger. Foot
X-Foot
e. Post total of COGS in Cash Rec Jrnl as a
Debit to COGS In Gen Ledger. Foot X-Foot
f. Post total of Inventory in Cash Rec Jrnl as a
Debit to Inventory In Gen Ledger. Foot X-Foot
30
3. Posting CRJ to Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
236
2
OBJ
a. Post total of Cash In Cash Rec Journal as a
debit to Cash Rec In Gen Ledger. Write Gen
Ledger Acct No below total to indicate Posting
b. Post total of Sales Discount in Cash Rec Jrnl
as a Credit to Sales Discount In Gen Ledger.
Foot X-Foot
END OF MONTH
c. Post total of Acct Rec In Cash Rec Jrnl as
a Credit to Acct Rec In Gen Ledger. Foot X-Foot
d. Post total of Sales in Cash Rec Jrnl as a
Credit to Sales Revenue In Gen Ledger. Foot
X-Foot
e. Post total of COGS in Cash Rec Jrnl as a
Debit to COGS In Gen Ledger. Foot X-Foot
f. Post total of Inventory in Cash Rec Jrnl as a
Debit to Inventory In Gen Ledger. Foot X-Foot
31
3a Posting CRJ to Cash Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
110
110
CASH
EOM
CR-5
6134
6134
32
3b Posting CRJ to Sales Disc Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
420
110
420
Sales Discount
EOM
CR-5
35
35
33
3c. Posting CRJ to Acct Rec Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
420
112
110
Accts Rec
112
EOM
SJ3
4319
4319
EOM
CR-5
1235
3084
34
3d. Posting CRJ to Sales Rev Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
420
112
410
110
Sales Revenue
410
EOM
SJ3
4319
4319
EOM
CR-5
3172
7491
35
3e. Posting CRJ to COGS Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
420
112
410
511
110
COGS
511
EOM
SJ3
1814
1814
EOM
CR-5
1707
3521
36
3f. Posting CRJ to Inventory Controlling Acct
Use Sales Jrnl, Cash Rec Jrnl, Accts Rec Sub
Ledger
239
2
OBJ
?
420
112
410
511
/131
110
Inventory
131
EOM
SJ3
1814
2071
EOM
CR-5
1707
364
37
PART 1 SUMMARY
CHAPTER 7 SPECIAL JOURNALS
I. Sales Journal A. Daily 1. Record Sales
2. Post in Ind Accts in AR Sub
Ledger B. End of Month 1. Post Db to Act
Rec in Gen Ledger 2.
Post Cr to Sales Rev in Gen Ledger
3. Post Db to COGS in Gen Ledger
4. Post Cr to Inventory in Gen
Ledger
I. Cash Receipts Journal A. Daily 1.
Record Money Reced 2. Post in Ind Accts
in Acct Rec Sub Ledger B. EOM Post to
Gen Ledger 1. Post Db to Cash 2. Post Db
to Sales Dis 3. Post Cr to Acct Rec 4.
Post Cr to Sales Rev 5. Post Db to COGS
6. Post Cr to Inventory
38
NEXT TOPIC

• Chapter 7

SPECIAL JOURNALS
Part 2
PURCHASES JOURNAL CASH PAYMENTS JOURNAL