Ch.10 Accounting for Sales & Cash Receipts
Subsidiary Ledgers & Controlling Accounts
 Selling price: an amount a business receives from the sale of an item
 Markup: the amount added to the cost of merchandise to determine the selling price
 All of the accounts receivable accounts should total to equal the balance in the
Accounts Receivable account
Sales Tax
 Sales Tax: a tax on a sale of merchandise or services
 Sales Tax Payable will be the account used to record the sales tax collected
 Sales Tax Payable is a liability so it has a credit balance
Sales Journal
 Sales journal: the special journal used to record only sales of merchandise on account
Accounts
Receivable
Debit
Sales
Credit
Sales Tax
Payable
Credit
 Notice that the sub-total (Sales Credit) is in the middle
 The Sales Tax Payable on the far right
 Accounts Receivable Debit (total of Sales + Sales Tax Payable ) listed in first column
 Figuring Sales Tax
o Price of Goods X Sales Tax Rate = Sales Tax
o Price of Goods + Sales Tax = Total Amount
o You will have to figure sales tax for transactions done in the application
problems
**Do working together 10-1 on pg 289
Posting from Sales Journal
 You will post the number from the Accounts Receivable column into the Accounts
Receivable ledger
 Column totals get posted to their respective titles in the general ledger
 On your sales journal page your two credit totals should equal what your total is for
your debit column
**Do working together 10-2 on pg 292
Cash Receipts Journal
 Sales discount: this is when we give our customers a discount for paying early
 The company will not do deposits every day, so once or twice a week they will record
cash and credit card sales
 Sales discount rate is going to be between 1-3%
 Figuring the sales discount:
 Sales Invoice Amount X Sales Discount Rate = Sales Discount
 You will have to figure the sales discount amount for the transactions in the application
problems
** Do working together 10-3 pg 301
Posting & Proving your Cash Receipts Journal
 Individual amounts from the general and accounts receivable columns will get posted
individually
 All special amount column totals will get posted to their respective titles in the general
ledger
 Proving cash will done the same as it was in previous chapters
 Once you have posted all your individual and total amounts you will prepare a Schedule
of Accounts Receivable
 Schedule of Accounts Receivable: a list of all customers and their amounts due
 The total you get from the Schedule of Accounts Receivable should match the total you
get in the general ledger for Accounts Receivable
**Do working together 10-4 pg 309
** Do application problems 10-1, 10-2 10-3, 10-4 & 10-M
** Test over Chapter10