With a special journal, summary postings of column totals are made to appropriate accounts

Special journals are designed for posting certain types of transactions. These can becreated for just about any transaction and will vary depending on the type of businessone is analyzing. You will use these for categories of transactions that have frequentusage and postings.The concept behind using special journals is to save time in making journal entries andposting them. With the special journal, you will save time by not having to write theaccount name, account number, and explanation for each transaction. Transactions arejust entered on a single line, with debits and credits noted in the columns provided.When it comes to posting, the special journal is also more efficient than the generaljournal. In the general journal, each transaction is posted individually to the indicatedgeneral ledger account. With the special journal, only the summary column totals needto be posted. The special journal provides the additional detail necessary when researchis conducted on the account. This does not eliminate the need for the general journal.There will always be entries that are not common and do not necessitate the opening ofa special journal for the few postings that appear. The company does have the choice topost all entries to a general journal. However, the special journal provides conveniencefor many types of transactions.

c. accounts receivable ledger.

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After the posting of the accounts payable ledger and general ledger is completed, the total of the accountspayable ledger balances should equal the general ledger balance of

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Every entry in the cash payments journal includes all of the following EXCEPT

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For the merchant, bank credit card sales are treated in a manner similar to

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A cash payments journal is a special journal used to record all of the following EXCEPT

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After posting is completed in the accounts receivable ledger and the general ledger, the total of the accountsreceivable ledger balances should equal the

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Summary posting from the sales journal normally would be completed in which of the following orders?

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When purchasing merchandise for resale for cash, record the transaction in the

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Q13A method of allocating merchandise cost requiring each item sold and each item remaining in inventory to be separatelyidentified with respect to its purchase cost is called the

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Look at the following transactions of Fooz Ball Town:

• July 5 Sold $5,000 of merchandise inventory, terms 1/15, n 30, FOB Destination with a cost of goods sold of $3,000 to Robby Red.
• July 6 Paid shipping cost of $200 on merchandise sold on July 5.
• July 10  Sold $1,500 of merchandise inventory for cash, FOB Shipping Point, with a cost of goods sold of $1,000.
• July 12 Purchased $10,000 of merchandise inventory, terms 2/15, n 45, FOB Destination from Gus Grass.
• July 15 Received payment from Robby Red from July 5 sale less the discount.
• July 16 Returned $2,500 of merchandise damaged in shipment from July 12 purchase.
• July 20 Paid the utility bill for $300.
• July 25  Paid for the July 15 purchase less the return and discount.
• July 30 Sold $7,000 of merchandise inventory, terms 1/15, n 30, FOB Shipping point with cost of goods sold $5,000 to Bobby Blue.

You can see how these journal entries (using the perpetual inventory method) would be recorded in the general ledger as by clicking fooz ball town to save space.

Note:  The entries would be slightly different under the periodic inventory method as cost of goods sold and merchandise inventory are not updated until the end of the period instead of with each sale or purchase.

The list of entries for these 9 transactions is long…can you imagine what it would look like when a company has hundreds of transactions a day?  It will be overwhelming so there needs to be a better way.  Special journals are a quicker and more efficient way to enter transactions.  Remember, we have 5 special journals:

• a sales journal to record ALL CREDIT SALES
• a purchases journal to record ALL CREDIT PURCHASES
• a cash receipts journal to record ALL CASH RECEIPTS
• a cash disbursements journal to record ALL CASH PAYMENTS; and
• a general journal to record adjusting and closing entries and any other entries that do not fit in one of the special journals.

Now we will classify Fooz Ball Town’s transactions into the proper special journals:

The July 10 sales is not recorded in the sales journal — why not?  It was a cash sale and not on credit.  The discussion continues by looking at each special journal in detail.

Sales Journal

The sales journal is used to record all sales on credit.  This means the customer has not paid but we will receive payment in the future.  The video shows an example of a sales journal under the periodic inventory method:

Under the perpetual inventory system, the Sales Journal would have another column to show Debit to Cost of Goods Sold and a Credit to Inventory.  For Fooz Ball Town, we identified the following transactions for the sales journal:

• July 5 Sold $5,000 of merchandise inventory, terms 1/15, n 30, FOB Destination with a cost of goods sold of $3,000 to Robby Red.
• July 30 Sold $7,000 of merchandise inventory, terms 1/15, n 30, FOB Shipping point with cost of goods sold $5,000 to Bobby Blue.

These entries would be recorded in the sales journal (instead of general journal entries) as:

The subsidiary (customer) ledgers would be updated daily but at the end of the period, the TOTALS only would be recorded in posted directly into the accounts listed with no journal entry necessary.

Cash Receipts Journal

The cash receipts journal is used to record all receipts of cash for any reason.  Anytime money comes into the company, the cash receipts journal should be used.

The cash receipts journal, under the perpetual inventory would, would also contain a column to Debit cost of goods sold and Credit inventory used for any cash sales.  For Fooz Ball Town, we identified two transactions for the cash receipts journal:

• July 10  Sold $1,500 of merchandise inventory for cash, FOB Shipping Point, with a cost of goods sold of $1,000.
• July 15 Received payment from Robby Red from $5,000 sale less the 1% discount.

The cash receipts journal for these transactions would be:

At the end of the period, the TOTALS only would be recorded in posted directly into the accounts listed with no journal entry necessary.

Purchase Journal

The purchases journal is used to record all purchases on credit.  This means purchases we have not paid for but will pay for in the future.  There was one transaction identified for the purchase journal for Fooz Ball Town:

• July 12 Purchased $10,000 of merchandise inventory, terms 2/15, n 45, FOB Destination from Gus Grass.

This would be record in a purchases journal (under the perpetual inventory system as):

The purchase from Gus Grass would be recorded in the accounts payable subsidiary ledger and the total would be recorded at the end on the period by posting directly to merchandise inventory and accounts payable.

This video demonstrates the purchase journal and cash disbursement journal:

Cash Disbursement Journal

The cash disbursement journal is used to record all payments of cash regardless of the reason.  Anytime cash leaves the company, it should be recorded in the cash disbursement journal.  We identified these transaction from Fooz Ball Town for the cash disbursement journal:

• July 6 Paid shipping cost of $200 on merchandise sold on July 5.
• July 20 Paid the utility bill for $300.
• July 25  Paid for the July 15 purchase from Gus Grass of $10,000 less the 2% discount and $2,500 return.

These entries would be recorded into a cash disbursement journal (under the perpetual inventory method) as:

At the end of the period, we would post the totals of  $7,650 credit to cash, the $7,500 debit to accounts payable, and the $150 credit to merchandise inventory.  The DR (debit) Other column would be handled a little differently as you need to look to the account column to find out where these individual amounts should be posted.  In this case, we would post a $200 debit to merchandise inventory and a $300 debit to utility expense.  Under the periodic inventory method, the July 6 shipping costs would go to a Transportation In account and the July 25 discount would go to Purchases Discounts.

General Journal

When using special journals, the general journal is used to record all adjusting entries, closing entries and anything else that doesn’t fit into the other special journals.  An example of this would be any returns or allowances coming from either the sales or purchase side.  For Fooz Ball Town, there is one transaction for the general journal:

• July 16 Returned $2,500 of merchandise damaged in shipment from July 12 purchase.

This journal entry is recorded, under the perpetual inventory method as:

This entry would then be posted to the accounts payable and merchandise inventory accounts both for $2,500.  Under the periodic inventory method, the credit would be to Purchase Returns and Allowances.

What is a special amount column used for in a journal?

When posting a column total in the purchases journal a credit should be posted to?

Which column totals of a journal are posted?

What are special journals used for in accounting?