2. Some of the action has been automated,
Some of the action has been automated,
so click the mouse when you see this
so click the mouse when you see this
lightning bolt in the lower right-hand
lightning bolt in the lower right-hand
corner of the screen. You can point and
corner of the screen. You can point and
click anywhere on the screen.
click anywhere on the screen.
3. Objectives
Objectives
1. Define an accounting system and
After studying this
describe its After studying this
implementation.
chapter, you should
chapter, you should
2. List the three objectives of internal
be able to:
be able to:
control, and define and give examples of
the five elements of internal control.
3. Journalize and post transactions in a
manual accounting system that uses
subsidiary ledgers and special journals.
4. Objectives
Objectives
4. Describe and give examples of additional
subsidiary ledgers and modified special
journals.
5. Apply computerized accounting to the
revenue and collection cycle.
6. Describe the basic features of e-commerce.
7. Objectives of Internal
Objectives of Internal
Control
Control
To provide reasonable assurance that:
1. assets are safeguarded and used
for business purposes.
2. business information is accurate.
3. employees comply with laws and
regulations.
8. Elements of Internal Control
1.
2.
3.
4.
5.
Control environment
Risk assessment
Control procedures
Monitoring
Information and communication
9. Elements of Internal Control
1.
2.
3.
4.
5.
Control environment
Risk assessment
Control procedures
Monitoring
Information and communication
10. Management philosophy and
Management philosophy and
operating style influences the
operating style influences the
control environment.
control environment.
11. Elements of Internal Control
Elements of Internal Control
1.
2.
3.
4.
5.
Control environment
Risk assessment
Control procedures
Monitoring
Information and communication
12. Once risks are identified, they can be
Once risks are identified, they can be
analyzed to estimate their significance, to
analyzed to estimate their significance, to
assess their likelihood of occurring, and to
assess their likelihood of occurring, and to
determine actions that will minimize them.
determine actions that will minimize them.
13. Elements of Internal Control
Elements of Internal Control
1.
2.
3.
4.
5.
Control environment
Risk assessment
Control procedures
Monitoring
Information and communication
14. Control Procedures
Control Procedures
Competent Personnel
Rotating Duties
Mandatory Vacations
Separating Responsibilities for
Related Operations
Separating Operations,
Custody of Assets, and
Accounting
Proofs and Security Measures
15. Control Procedures
Control Procedures
Competent Personnel
Rotating Duties
Mandatory Vacations
Separating Responsibilities for
Related Operations
Separating Operations,
Custody of Assets, and
Accounting
Proofs and Security Measures
16. Separating
Otherwise, the following
Separating
Otherwise, the following
Responsibilities for
abuses are possible:
Responsibilities for
abuses are possible:
Related Operations
1. Orders may be placed on the basis of
Related Operations
friendship with a supplier, rather than on
price, quality, and other objective factors.
2. The quantity and quality of supplies received
may not be verified, thus causing payment
for supplies not received or poor-quality
supplies.
3. Supplies may be stolen by the employee.
4. The validity and accuracy of invoices may be
verified carelessly.
17. Control Procedures
Control Procedures
Competent Personnel
Rotating Duties
Mandatory Vacations
Separating Responsibilities for
Related Operations
Separating Operations,
Custody of Assets, and
Accounting
Proofs and Security Measures
19. Elements of Internal Control
Elements of Internal Control
1.
2.
3.
4.
5.
Control environment
Risk assessment
Control procedures
Monitoring
Information and communication
20. Clues to Potential Problems
Clues to Potential Problems
Warning signs with regard to people:
1. Abrupt changes in lifestyle.
2. Close social relationships with suppliers.
3. Refusing to take a vacation.
4. Frequent borrowing from other employees.
5. Excessive use of alcohol or drugs.
21. Clues to Potential Problems
Clues to Potential Problems
Warning signs from the accounting system:
1. Missing documents or gaps in transaction
numbers.
2. An unusual increase in customer refunds.
3. Differences between daily cash receipts and
bank deposits.
4. Sudden increase in slow payments.
5. Backlog in recording transactions.
23. General Ledger and Subsidiary Ledgers
General Ledger and Subsidiary Ledgers
General Ledger
Cash
11
Accounts Receivable
Subsidiary Ledger
Accts. Rec.
12
Customer Accounts
A
B
C
Supplies
14
Accounts Payable
Subsidiary Ledger
Accts. Pay.
21
D
Creditor Accounts
A
B
C
D
24. Special Journals
SELLING
Providing services on account
recorded in
Revenue journal
recorded in
Receipt of cash from any source
recorded in
recorded in
Cash receipts journal
BUYING
Purchase of items on account
recorded in
Purchases journal
recorded in
Payment of cash for any purpose
recorded in
recorded in
Cash payments journal
25.
26. The Revenue Journal
The Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
Account Debited
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
1
1
2
2
3
3
4
4
5
5
6
6
All sales on account are recorded in
All sales on account are recorded in
this journal. Each sales invoice is
this journal. Each sales invoice is
listed in numerical order.
listed in numerical order.
27. The Revenue Journal
The Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
Account Debited
MyMusicClub.com
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
2 2 0 0 00
1
2
3
3
4
4
5
5
6
6
Performed services on credit to
Performed services on credit to
MyMusic.com, $2,200.
MyMusic.com, $2,200.
28. The Revenue Journal
The Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
Account Debited
MyMusicClub.com
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
2 2 0 0 00
1
2
3
3
4
4
5
5
6
6
Notice that only one line is
Notice that only one line is
required to make the entry.
required to make the entry.
29. Posting from the Revenue Journal
Posting from the Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
Account Debited
MyMusicClub.com
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
2 2 0 0 00
1
2
3
3
4
4
5
5
6
6
To update the MyMusicClub.com account,
To update the MyMusicClub.com account,
the $2,200 debit is posted to the accounts
the $2,200 debit is posted to the accounts
receivable subsidiary ledger.
receivable subsidiary ledger.
30. Posting from the Revenue Journal
Posting from the Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
Post
Ref.
Account Debited
Accts. Rec. – Debit
Fees Earned – Credit
MyMusicClub.com
2 2 0 0 00
1
2
3
3
4
4
5
6
Accounts Receivable Subsidiary Ledger
MyMusicClub.com
Date
2006
Mar. 2
Item
P.R.
R35
Debit
2,200
Credit
Balance
2,200
5
6
31. Posting from the Revenue Journal
Posting from the Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
Post
Ref.
Account Debited
Accts. Rec. – Debit
Fees Earned – Credit
MyMusicClub.com
2 2 0 0 00
1
2
3
3
4
4
5
6
Accounts Receivable Subsidiary Ledger
MyMusicClub.com
Date
2006
Mar. 2
Item
P.R.
R35
Debit
2,200
Credit
Balance
2,200
This procedure is repeated for each posting
to the accounts receivable subsidiary ledger.
5
6
32. Posting from the Revenue Journal
Posting from the Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
2003
1 Mar. 2 615
2
6 616
3
18 617
4
27 618
Account Debited
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
MyMusicClub.com
2 2 0 0 00
1
RapZone.com
1 7 5 0 00
2
Web Cantina
2 6 5 0 00
3
MyMusicClub.com
3 0 0 0 00
4
5
5
6
6
Assume that similar entries were
Assume that similar entries were
journalized and posted during the
journalized and posted during the
month of March.
month of March.
33. Posting from the Revenue Journal
Posting from the Revenue Journal
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
6 616
3
18 617
4
27 618
5
31
Account Debited
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
MyMusicClub.com
2 2 0 0 00
1
RapZone.com
1 7 5 0 00
2
Web Cantina
2 6 5 0 00
3
MyMusicClub.com
3 0 0 0 00
4
9 6 0 0 00
5
6
6
On March 31, the revenue journal is
On March 31, the revenue journal is
totaled and ruled.
totaled and ruled.
34. Posting the Revenue Journal Total
Posting the Revenue Journal Total
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
6 616
3
18 617
4
27 618
5
31
Account Debited
Post
Ref.
Accts. Rec. – Debit
Fees Earned – Credit
MyMusicClub.com
2 2 0 0 00
1
RapZone.com
1 7 5 0 00
2
Web Cantina
2 6 5 0 00
3
MyMusicClub.com
3 0 0 0 00
4
9 6 0 0 00
5
6
6
Next, the revenue journal’s total
Next, the revenue journal’s total
($9,600) is posted to the general ledger.
($9,600) is posted to the general ledger.
35. Posting the Revenue Journal Total
Posting the Revenue Journal Total
GENERAL LEDGER
ACCOUNT
Date
2006
Mar. 1
31
Accounts Receivable
Item
Post.
Ref.
Account No. 12
Balance
Dr.
Balance
Cr.
Dr.
3 400 00
R359 600 00
Revenue Journal, page 35
13 000 00
Cr.
36. Posting the Revenue Journal Total
Posting the Revenue Journal Total
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
6 616
3
18 617
Accts. Rec. – Debit
Fees Earned – Credit
27 618
5
31
MyMusicClub.com
2 2 0 0 00
1
RapZone.com
1 7 5 0 00
2
Web Cantina
2 6 5 0 00
3
MyMusicClub.com
3 0 0 0 00
4
9 6 0 0 00
5
(12)(41)
4
6
Account Debited
Post
Ref.
6
By placing the account number here, we
indicate that $9,600 has been debited to
Accounts Receivable in the general ledger.
37. Posting the Revenue Journal Total
Posting the Revenue Journal Total
GENERAL LEDGER
ACCOUNT
Date
2006
Mar. 31
Fees Earned
Item
Post.
Ref.
R35
Account No. 41
Balance
Dr.
Cr.
9 600 00
Dr.
Cr.
9 600 00
38. Posting the Revenue Journal Total
Posting the Revenue Journal Total
Page 35
Revenue Journal
Date
Invoice
No.
2006
1 Mar. 2 615
2
6 616
3
18 617
Accts. Rec. – Debit
Fees Earned – Credit
27 618
5
31
MyMusicClub.com
2 2 0 0 00
1
RapZone.com
1 7 5 0 00
2
Web Cantina
2 6 5 0 00
3
MyMusicClub.com
3 0 0 0 00
4
9 6 0 0 00
5
(12)(41)
4
6
Account Debited
Post
Ref.
6
Placing “41” here indicates that $9,600 has
been posted to the credit side of Fees
Earned in the general ledger.
40. The Cash Receipts Journal
The Cash Receipts Journal
All transactions that
All transactions that
involve the receipt of cash
involve the receipt of cash
are recorded in the cash
are recorded in the cash
receipts journal.
receipts journal.
41. The Cash Receipts Journal
The Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
2006
Account Credited
Mar. 1 Rent Revenue
Post
Ref.
Page 14
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
NetSolutions received $400 cash
NetSolutions received $400 cash
on March 1 for the month’s rent.
on March 1 for the month’s rent.
Cash
Dr.
400
42. The Cash Receipts Journal
The Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Post
Ref.
Page 14
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
3,400
2,200
1,750
Cash
Dr.
400
3,400
2,200
1,750
During March, NetSolutions collected
During March, NetSolutions collected
cash from three customers.
cash from three customers.
43. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Post
Ref.
Page 14
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
3,400
2,200
1,750
Cash
Dr.
400
3,400
2,200
1,750
Each account under “Accounts
Each account under “Accounts
Receivable Cr.” is posted to the accounts
Receivable Cr.” is posted to the accounts
receivable subsidiary ledger.
receivable subsidiary ledger.
44. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
Page 14
Post
Ref.
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
400
3,400
2,200
1,750
3,400
2,200
1,750
Accounts Receivable Subsidiary Ledger
Web Cantina
Date
Item
P.R.
Debit
Credit
2006
Mar. 1 Bal.
18
R35
19
2,650
3,400
Cash
Dr.
Balance
3,400
6,050
2,650
45. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
Post
Ref.
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Other
Accounts
Cr.
√
Accounts
Receivable
Cr.
400
400
3,400
2,200
1,750
3,400
2,200
1,750
Accounts Receivable Subsidiary Ledger
Web Cantina
Date
Item
P.R.
Debit
Credit
2006
Mar. 1 Bal.
18
R35
19
CR14
2,650
3,400
Cash
Dr.
Balance
3,400
6,050
2,650
46. The Cash Receipts Journal
The Cash Receipts Journal
After all journalizing and
After all journalizing and
posting to the accounts
posting to the accounts
receivable subsidiary ledger for
receivable subsidiary ledger for
the month is complete, the
the month is complete, the
columns are totaled.
columns are totaled.
47. The Cash Receipts Journal
The Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
31
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Post
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
√
√
√
400
3,400
2,200
1,750
7,350
Cash
Dr.
400
3,400
2,200
1,750
7,750
The total “Cash Dr.” column
The total “Cash Dr.” column
equals the total of the two
equals the total of the two
credit columns.
credit columns.
48. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
31
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Post
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
√
√
√
400
3,400
2,200
1,750
7,350
Cash
Dr.
400
3,400
2,200
1,750
7,750
GENERAL LEDGER
Account: Accounts Receivable
No. 12
The three Item P.R. items Credit Balance
The three circled items are
Date circled Debit are
Mar.
Bal
√
posted to1the general ledger. 3,400
posted to the general ledger.
31
R35 9,600
13,000
Let’s post Accounts Receivable..
Let’s post Accounts Receivable
2006
49. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
31
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Post
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
√
√
√
400
3,400
2,200
1,750
7,350
Cash
Dr.
400
3,400
2,200
1,750
7,750
GENERAL LEDGER
Account: Accounts Receivable
Date Item P.R.
2006
Debit Credit
Mar. 1 Bal
√
31
R35 9,600
31
CR14
7,350
No. 12
Balance
3,400
13,000
5,650
50. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
31
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Post
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
√
√
√
400
3,400
2,200
1,750
7,350
( √)
(12)
Cash
Dr.
400
3,400
2,200
1,750
7,750
51. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
The $7,750 total in the
The $7,750 total in the
Cash Debit column is
Cash Debit column is
posted to Cash in a similar
posted to Cash in a similar
manner.
manner.
52. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
The $400 credit to Rent Revenue
The $400 credit to Rent Revenue
could have been posted earlier, but
could have been posted earlier, but
posting it at the same time as other
posting it at the same time as other
general ledger accounts is proper.
general ledger accounts is proper.
53. Posting the Cash Receipts Journal
Posting the Cash Receipts Journal
A completely posted cash
A completely posted cash
receipts journal is shown
receipts journal is shown
in the next slide.
in the next slide.
54. Posted Cash Receipts Journal
Posted Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
Account Credited
Mar. 1
19
28
30
31
Rent Revenue
Web Cantina
MyMusicClub.com
RapZone.com
2006
Page 14
Post
Ref.
42
Other
Accounts
Cr.
Accounts
Receivable
Cr.
400
√
√
√
400
( )
√
3,400
2,200
1,750
7,350
(12)
Cash
Dr.
400
3,400
2,200
1,750
7,750
(11)
55. Accounts
Receivable
Control
Account
GENERAL LEDGER
ACCOUNT Accounts Receivable
Date Item P.R.
Debit Credit
Mar. 1 Bal
√
31
R35 9,600
31
CR14
7,350
No. 12
Balance
3,400
13,000
5,650
If the accounts receivable
If the accounts receivable
account in the general ledger
account in the general ledger
only shows summary totals,
only shows summary totals,
where are the individual
where are the individual
customer balances?
customer balances?
56. Accounts
Receivable
Control
Account
GENERAL LEDGER
ACCOUNT Accounts Receivable
Date Item P.R.
Debit Credit
Mar. 1 Bal
√
31
R35 9,600
31
CR14
7,350
No. 12
Balance
3,400
13,000
5,650
MyMusicClub.com
Date
Accounts
Receivable
Subsidiary
Ledger
Item
Debit
Credit Balance
R35 2,200
R35 3,000
CR14
3/2
3/27
3/28
P.R.
2,200
5,200
3,000
2,200
RapZone.com
Date
Item
Debit
Credit Balance
R35 1,750
CR14
3/6
3/30
P.R.
1,750
--
1,750
Web Cantina
Date
Item
P.R.
Debit
Credit Balance
3/1 Bal.
3/18
R35 2,650
3/19
CR14
3,400
6,050
2,650
3,400
57.
58. The purchases journal is
The purchases journal is
designed for recording all
designed for recording all
purchases on account.
purchases on account.
59. Journalizing in the Purchases Journal
Journalizing in the Purchases Journal
Date
2006
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Mar. 3 Howard Supplies
600
600
On March 3, 2003, NetSolutions
purchased supplies from Howard
Supplies, $600.
60. Posting the Purchases Journal
Posting the Purchases Journal
Date
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
2006
Mar. 3 Howard Supplies
600
600
Accounts Payable Subsidiary Ledger
Howard Supplies
Date
2006
Item
P.R.
Dr.
Cr.
Balance
Mar 3
600
To keep the accounts payable600
subsidiary ledger current, this entry
is posted on March 3.
61. Posting the Purchases Journal
Posting the Purchases Journal
Date
2006
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Mar. 3 Howard Supplies
600
600
Accounts Payable and Supplies
will be posted as totals.
62. Journalizing in the Purchases Journal
Journalizing in the Purchases Journal
Date
2006
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Mar. 3 Howard Supplies
7 Donnelly Supplies
600
420
600
420
On March 7, NetSolutions
purchased supplies from Donnelly
Supplies, $420.
63. Journalizing in the Purchases Journal
Journalizing in the Purchases Journal
Date
2006
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Mar. 3 Howard Supplies
7 Donnelly Supplies
600
420
600
420
64. Journalizing in the Purchases Journal
Journalizing in the Purchases Journal
Date
2006
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Mar. 3 Howard Supplies
7 Donnelly Supplies
12 Jewett Bus. Sys.
600
420
2,800
600
420
Off. Equip.
Because there isn’t a special purchased
On March 12, NetSolutions column for
office equipment from Jewett Business
Office Equipment, this purchase was
recorded under “Other Accounts Dr.”
Systems, $2,800.
2,800
65. Journalizing in the Purchases Journal
Journalizing in the Purchases Journal
Date
2006
Mar. 3
7
12
19
27
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
600
420
Off. Equip.
2,800
1,450
960
Now, let’s look at the rest of March’s entries
(assume that all postings to the accounts payable
subsidiary ledger have been made).
66. Totaling the Purchases Journal
Totaling the Purchases Journal
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Date
2006
Mar. 3
7
12
19
27
31
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
600
420
Off. Equip.
1,450
960
3,430
2,800
2,800
At the end of March, all columns are totaled
At the end of March, all columns are totaled
$6,230 debits and credits is verified.
$6,230 = $3,430 + $ 2,800
= $3,430 + $ 2,800
and equality of debits and credits is verified.
and equality of
67. Posting the Purchases Journal
Posting the Purchases Journal
Date
2006
Mar. 3
7
12
19
27
31
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
600
420
Off. Equip.
1,450
960
3,430
The next step is to post to the
general journal.
2,800
2,800
68. Date
2006
Mar. 3
7
12
19
27
31
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
600
420
Off. Equip.
1,450
960
3,430
2,800
GENERAL LEDGER
ACCOUNT Accounts Payable
Date Item P.R.
Mar. 1 Bal
31
P11
Debit Credit
6,230
2,800
No. 21
Balance
1,230
7,460
69. Date
2003
Mar. 3
7
12
19
27
31
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
(21)
600
420
Off. Equip.
1,450
960
3,430
2,800
GENERAL LEDGER
ACCOUNT Accounts Payable
Date Item P.R.
Mar. 1 Bal
31
P11
Debit Credit
6,230
2,800
No. 21
Balance
1,230
7,460
70. Date
2003
Mar. 3
7
12
19
27
31
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
(21)
600
420
Off. Equip. 18
1,450
960
3,430
(14)
Supplies is posted as a total of $3,430
to general ledger account 21. Office
Equipment is posted individually.
2,800
2,800
71. Date
2006
Mar. 3
7
12
19
27
31
Page 11
PURCHASES JOURNAL
Accts.
Other
Post Payable Supplies Accounts Post
Account Credited Ref.
Cr.
Dr.
Dr.
Ref. Amount
Howard Supplies
Donnelly Supplies
Jewett Bus. Sys.
Donnelly Supplies
Howard Supplies
600
420
2,800
1,450
960
6,230
(21)
600
420
Off. Equip. 18
1,450
960
3,430
(14)
NetSolutions had only one entry in the
“Other Accounts Dr.” column. If there were
others, they would be posted individually.
Therefore, the total is not posted. A check
mark indicates that the total was not posted.
2,800
2,800
( )
73. All payments are
All payments are
recorded in the cash
recorded in the cash
payments journal.
payments journal.
NetSolutions makes all
NetSolutions makes all
payments by check.
payments by check.
74. Let’s make all of the
Let’s make all of the
cash payment journal
cash payment journal
entries for March.
entries for March.
75. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
Ck.
No.
150
Account Debited
Rent Expense
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
1,600
On March 2, NetSolutions paid
the rent for March by issuing
Check No. 150 for $1,600.
PAGE 7
Cash
Cr
1,600
76. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
Ck.
No.
150
151
Account Debited
Rent Expense
Grayco Supplies
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
Cash
Cr
1,600
1,230
On March 15, issued Check No. 151 to
Grayco Supplies on account, $1,230.
1,600
1,230
77. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
Ck.
No.
150
151
Account Debited
Rent Expense
Grayco Supplies
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
1,600
√
1,230
Cash
Cr
1,600
1,230
Accounts Payable Subsidiary Ledger
Grayco Supplies
Let’s post to the accounts payable
Date
Item P.R.
Dr.
Cr.
Balance
subsidiary Mar. 3 Bal. this time to keep1,230
ledger at
15
CP7
the creditor’s account1,230
current. ---
78. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
Ck.
No.
150
151
152
Account Debited
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
Rent Expense
Grayco Supplies
√
Jewett Business Sys.
1,600
1,230
2,800
On March 21, issued Check No.
152 as payment on account to
Jewett Business Systems, $2,800.
Cash
Cr
1,600
1,230
2,800
79. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
22
Ck.
No.
150
151
152
153
Account Debited
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
Rent Expense
Grayco Supplies
√
Jewett Business Sys. √
Donnelly Supplies.
1,600
1,230
2,800
420
On March 22, issued Check No.
153 as payment on account to
Donnelly Supplies, $420.
Cash
Cr
1,600
1,230
2,800
420
80. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
22
30
Ck.
No.
150
151
152
153
154
Account Debited
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
Rent Expense
Grayco Supplies
√
Jewett Business Sys. √
Donnelly Supplies. √
Utilities Expense
1,600
1,230
2,800
420
1,050
Cash
Cr
1,600
1,230
2,800
420
1,050
On March 30, issued Check No. 154 as
payment for utility bill, $1,050.
81. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
22
30
31
Ck.
No.
150
151
152
153
154
155
Account Debited
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
Rent Expense
Grayco Supplies
√
Jewett Business Sys. √
Donnelly Supplies. √
Utilities Expense
Howard Supplies
1,600
1,230
2,800
420
1,050
600
On March 31, issued Check
No. 155 on account to Howard
Supplies, $600
Cash
Cr
1,600
1,230
2,800
420
1,050
600
82. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
22
30
31
31
Ck.
No.
150
151
152
153
154
155
Account Debited
Rent Expense
Grayco Supplies
Jewett Business Sys.
Donnelly Supplies.
Utilities Expense
Howard Supplies
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
1,600
√
√
√
√
1,230
2,800
420
1,050
2,650
600
5,050
The journal is ruled, summed, and
verified for equality of debits and
the “Cash Cr.” column.
Cash
Cr
1,600
1,230
2,800
420
1,050
600
7,700
83. CASH PAYMENTS JOURNAL
Date
2006
Mar. 2
15
21
22
30
31
31
Ck.
No.
150
151
152
153
154
155
Account Debited
Rent Expense
Grayco Supplies
Jewett Business Sys.
Donnelly Supplies.
Utilities Expense
Howard Supplies
PAGE 7
Other Accounts
Post Accounts Payable
Ref.
Dr.
Dr.
52
√
√
√
54
√
1,600
600
5,050
1,600
1,230
2,800
420
1,050
600
7,700
(21)
(11)
1,230
2,800
420
1,050
2,650
(√ )
Cash
Cr
Individual items in the “Other Accounts Dr.”
column are posted. Then the totals for “Accounts
Payable Dr.” and “Cash Cr.” are posted.
85. GENERAL LEDGER
Accounts Payable
(Controlling)
ACCOUNT Accounts Payable
Date Item P.R.
Mar. 1 Bal
31
31
No. 12
Debit Credit
P11
CP7 5,050
6,230
Balance
1,230
7,460
2,410
Donnelly Supplies
Date
Accounts
Jewett Business
Payable
Systems also has
Subsidiary
a zero balance, so
Ledger
that account was
omitted for space
reasons.
Item
Mar 2
19
22
P.R.
P11
P11
CP7
Debit
Credit
420
1,450
420
Balance
420
1,870
1,450
Grayco Supplies
Date
Item
P.R.
Mar 1 Bal.
15
CP7
-Howard Supplies
Date
Mar 3
27
31
Item
P.R.
P11
P11
CP7
Debit
Credit
1,230
0
1,230
Debit
Credit
600
960
600
Balance
Balance
600
1,560
960
86. Advantages of a Computerized
Advantages of a Computerized
Accounting System Over a
Accounting System Over a
Manual Accounting System
Manual Accounting System
1. Computerized systems simplify the recordkeeping process.
2. Computerized systems are generally more
accurate.
3. Computerized systems provide management
current account balance information to
support decision making.
87. The Revenue and Collection
The Revenue and Collection
Cycle in QuickBooks
Cycle in QuickBooks
From Exhibit 10, page 203 of textbook
Mail invoice to
customer
88. The Revenue and Collection
The Revenue and Collection
Cycle in QuickBooks Continued
Cycle in QuickBooks Continued
From Exhibit 10, page 203 of textbook
89. The Revenue and Collection
The Revenue and Collection
Cycle in QuickBooks Continued
Cycle in QuickBooks Continued
From Exhibit 10, page 203 of textbook
90. Advanced Areas Where the
Advanced Areas Where the
Internet is Being Used for
Internet is Being Used for
Business Purposes
Business Purposes
Supply chain management (SCM)
Customer relationship management (CRM)
Product life-cycle management (PLM)