Chapter Objec0Ves: de La Salle Lipa Financial Accoun0Ng and Repor0Ng Mspunay
Chapter Objec0Ves: de La Salle Lipa Financial Accoun0Ng and Repor0Ng Mspunay
Chapter Objec0Ves: de La Salle Lipa Financial Accoun0Ng and Repor0Ng Mspunay
Module 2:
Recording Business Transac0on
(General and Special Journals)
Chapter Objec0ves
• Differen0ate the opera0ng cycle for service and
merchandising businesses
• Review the purchase and sales cycle and its effect
on the accoun0ng records
• Differen0al general and special journals
• Determine transac0ons that are recorded in the
special journals
MSPunay2018
MSPunay2018
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Warehouse
(Quan0ty)
General Ledger
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General Ledger
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General ledger
• General ledger is the principal ledger, which contains
all of the balance sheet and income statement accounts
• Each subsidiary ledger is represented in the general
ledger by a summarizing account, called a controlling
account
• The balance in the controlling accounts must equal the
sum of the balances in the subsidiary ledgers
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Subsidiary Ledgers
• Subsidiary ledgers are a listing of individual
accounts with common characteristics
– Accounts receivable ledgers
– Accounts payable ledgers
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Controlling vs Subsidiary
Controlling Subsidiary
Balance Balances
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
C Company
Date PR Debit Credit Balance
Jan. 25 S5 415 415
GENERAL LEDGER
Accounts Receivable No. 106
Date PR Debit Credit
Jan. 31 S5 1,915 1,915
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Purchase on Inventory
• Merchandise is purchased for resale to customers,
the account
– Merchandise Inventory is debited for the cost of
goods.
• Like sales, purchases may be made for cash or on
account (credit).
• The purchase is normally recorded by the purchaser
when the goods are received from the seller.
• Each credit purchase should be supported by a
purchase invoice.
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Purchase Discount
• Credit terms may permit the buyer to claim a cash
discount for the prompt payment of a balance due.
• The buyer calls this discount a purchase discount.
• Like a sales discount, a purchase discount is based
on the invoice cost less returns and allowances, if
any.
MSPunay2018
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Seller Buyer
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Seller Buyer
Accounts Receivable xx Purchases xx
Sales xx Accounts Payable xx
Freight-In xx
Cash (or AP) xx
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Seller Buyer
Accounts Receivable xx Purchases xx
Sales xx Accounts Payable xx
Freight-Out xx
Cash (or AP) xx
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
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Seller Buyer
Accounts Receivable xx Purchases xx
Sales xx Accounts Payable xx
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Recording Transac.ons
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Recording Transac.ons
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Special Journals
• Special journals
– organizing transactions into common groups
and require less time and effort for posting
Transactions Special Journal (Abbreviation)
Sales on credit Sales Journal (S)
Purchases on credit Purchases Journal (P)
Cash receipts Cash Receipts Journal (CR)
Cash Payments Cash Payments Journal (CP)
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Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited NumberPR Sales Inventory
2016
Feb. 2 Jason Henry 307 450 315
MSPunay2018
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited Number PR Sales Inventory
2016
Feb. 2 Jason Henry 307 450 315
Daily, each RECEIVABLE LEDGER
transaction is
posted to the Jason Henry
appropriate Date PR Debit Credit Balance
Accounts
Receivable Ledger
account.
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Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited Number PR Sales Inventory
2016
Feb. 2 Jason Henry 307 450 315
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Sales Journal
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De La Salle Lipa 1st Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/RCr. Dr COGS Cr
Date Debited Number PR Sales Inventory
Feb.
2016
2 Jason Henry 307 ü 450 315
7 Albert Co. 308 ü 500 355
13 Bam Moore 309 ü 350 260
ü
(106/413) (502/119)
On Feb. 28th,
GENERAL LEDGER
Accounts Receivable No. 106 post the
Balance column total to
Feb. 28 S1 2,150 2,150 Accounts
Receivable
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Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited Number PR Sales Inventory
Feb.
2016
2 Jason Henry 307 ü 450 315
7 Albert Co. 308 ü 500 355
13 Bam Moore 309 ü 350 260
ü
25
28
Frank Booth
Albert Co.
312
313 ü 175
250
95
170
(106/413) (502/119)
th
GENERAL LEDGER On Feb. 28 ,
Sales No. 413 post the
Date PR Debit Credit Balance column total
Feb. 28 S1 2,150 2,150 to Sales
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Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited Number PR Sales Inventory
Feb.
2016
2 Jason Henry 307 ü 450 315
7 Albert Co. 308 ü 500 355
13 Bam Moore 309 ü
ü
350 260
22
15 Paul Roth
Jason Henry
310
311 ü
ü
200
225
150
155
28
25 Frank Booth
Albert Co.
312
313 ü 175
250
95
170
(106/413) (502/119)
GENERAL LEDGER
Inventory No. 119
Date PR Debit Credit
Now post the
Feb. 28 S1 1,500 1,500 COGS and
Inventory
accounts
GENERAL LEDGER
Cost of Goods Sold No. 502
Date PR Debit Credit Balance
Feb. 28 S1 1,500 1,500
MSPunay2018
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Sales Journal
SALES JOURNAL Page 1
Account Invoice Dr. A/R Cr. Dr COGS Cr
Date Debited Number PR Sales Inventory
Feb.
2016
2 Jason Henry 307 ü 450 315
7 Albert Co. 308 ü 500 355
13 Bam Moore 309 ü
ü
350 260
15
22
Paul Roth
Jason Henry
310
311 üü
200
225
150
155
25
28
Frank Booth
Albert Co.
312
313 ü 175
250
95
170
(106/413) (502/119)
GENERAL LEDGER
Inventory No. 119 Remember to update the
Date PR Debit Credit Balance
Feb. 28 S1 1,500 1,500 account balances and the
posting references
GENERAL LEDGER
Cost of Goods Sold No. 502
Date PR Debit Credit Balance
Feb. 28 S1 1,500 1,500
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De La Salle Lipa 1 Semester SY 2018-2019
Financial Accoun0ng and Repor0ng MSPunay
Purchases Journal
PURCHASES JOURNAL Page 3
Accts. Office Other
Invoice Payable Inventory Supplies Accts.
Date Account Date Terms PR Cr. Dr. Dr. Dr.
2016
Feb 3 Horung Supply Co Feb. 2 n/30 ü 350 275 75
5 Ace Mfg. Co 5 2/10,n/30 ü 200 200
13 Wynet & Co. 10 2/10,n/30 ü 150 150
20 Smite Co. 18 2/10,n/30 ü 300 300
25 Ace Mfg. Co 24 2/10,n/30 ü 100 100
28 Store supplies/ITT Co. 28 n/30 125/ ü 225 125 25 75
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Chapter Objec0ves
ü Differen0ate the opera0ng cycle for service and
merchandising businesses
ü Review the purchase and sales cycle and its effect
on the accoun0ng records
ü Differen0al general and special journals
ü Determine transac0ons that are recorded in the
special journals
MSPunay2018