Transcript 3.01 part 3

LESSON 2-1
Departmental Sales on
Account and Sales
Returns and Allowances
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
DEPARTMENTAL SALES ON ACCOUNT
 For a business to have complete departmental data,
the will record both purchases and sales transactions
by department
 Departmental businesses will record all departmental
sales on account in a sales journal.
 The sales journal contains 1 debit column:
 Accounts Receivable Debit
 It contains multiple credit columns:
 Sales Tax payable
 One column for sales for each department
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
SALES INVOICES
 Sales invoices are prepared for customers in
duplicate
 The customer receives the original and the duplicate is the
source document for journalizing the transaction
 A sales invoice shows the amount of merchandise
sold by the department
 All departmental sales are recorded at the time of
the sale, regardless of when payment is made
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
JOURNALIZING SALES ON ACCOUNT
page 37
June 1. Sold audio equipment on account to Kim Electronics, $280.00,
plus sales tax, $23.10; total, $303.10. Sales Invoice No. 101.
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1. Write the date.
2. Write the customer name.
3. Write the sales invoice number.
4. Write the total invoice amount.
5. Write the sales tax payable amount.
6. Write the sales amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
POSTING FROM A SALES JOURNAL TO
THE ACCOUNTS RECEIVABLE LEDGER
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page 38
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1. Write date.
2. Write sales journal page.
3. Enter amount in Debit column.
4. Enter account balance.
5. Write customer number in Post. Ref. column of sales journal.
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
POSTING FROM A SALES JOURNAL
TO A GENERAL LEDGER ACCOUNT
page 39
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1. Write date.
4. Enter account balance.
2. Write sales journal page.
5. Write general ledger account
number in parentheses.
3. Enter debit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
SALES RETURNS & ALLOWANCES
 On occasion a customer will return merchandise to the
business

The source document prepared by the vendor showing the
amount deducted for returns & allowances is called a credit
memorandum
 A return of a previous sale will affect the sales tax
payable and the sales returns and allowances accounts
 Sales returns & allowances are kept in a separate account
from the sales account

Sales return & allowances is a contra account to the Sales
account
 Its normal balance is a debit
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
JOURNALIZING SALES
RETURNS AND ALLOWANCES
page 40
June 5. Granted credit to Kim Electronics for audio equipment returned, $130, plus
sales tax, $10.73, from Sales Invoice No. 101; total, $140.73. Credit Memo No. 43.
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4.
Write date.
Enter accounts to be debited.
Record credit memo number.
Write debit amounts.
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5. Enter accounts to be credited.
6. Draw diagonal line.
7. Write credit amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School
POSTING FROM GENERAL JOURNAL
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page 41
1. Date
2. Journal page
number
3
3. Debit amounts
1
4. Credit amount
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5. Account numbers
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2
CENTURY 21 ACCOUNTING © Thomson/South-Western
5
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5
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Modified by D. Burns, West Johnston High School
TERM REVIEW
page 43
 credit memorandum
CENTURY 21 ACCOUNTING © Thomson/South-Western
Modified by D. Burns, West Johnston High School