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CHAPTER ELEVEN ACCOUNTING FOR SALES AND CASH RECEIPTS CHAPTER ELEVEN ACCOUNTING FOR SALES AND CASH RECEIPTS

MERCHANDISING BUSINESS Ø Purchases merchandise from vendors/suppliers and sells that merchandise to customers Ø MERCHANDISING BUSINESS Ø Purchases merchandise from vendors/suppliers and sells that merchandise to customers Ø Revenue is now from Sales. o Rather than the performance of services

MERCHANDISING BUSINESSES Ø Retailer o Sells to final consumers Ø Evidenced by: o Cash MERCHANDISING BUSINESSES Ø Retailer o Sells to final consumers Ø Evidenced by: o Cash Register tape o Sales Ticket • One copy given to the customer and the other to the Accounting Department

MERCHANDISING BUSINESSES Ø Wholesaler o Purchases merchandise from manufacturer o Sells to retailers • MERCHANDISING BUSINESSES Ø Wholesaler o Purchases merchandise from manufacturer o Sells to retailers • Usually “on account” ØSales Invoice generated for each sale o One to customer o One to the Accounting Department o One shipped with merchandise

CREDIT MEMORANDUM Ø Issued by seller indicating the customer’s Accounts Receivable account has been CREDIT MEMORANDUM Ø Issued by seller indicating the customer’s Accounts Receivable account has been credited for the amount of a: o Return - Merchandise returned for a refund o Allowance - Customer is granted a price reduction because of defect or other problems with the merchandise. Ø One copy of memo to the customer Ø One copy sent to Accounting Department

MERCHANDISE REVENUE ACCOUNTS SALES TAX PAYABLE SALES RETURNS & ALLOWANCES SALES DISCOUNTS MERCHANDISE REVENUE ACCOUNTS SALES TAX PAYABLE SALES RETURNS & ALLOWANCES SALES DISCOUNTS

SALES ACCOUNT REVENUE account used to record sales of merchandise. Similar to the Fees SALES ACCOUNT REVENUE account used to record sales of merchandise. Similar to the Fees account used by a service business SALES DR. CR. + The account is credited for the selling price of merchandise sold.

GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Cash Sales PR DEBIT CREDIT 100 GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Cash Sales PR DEBIT CREDIT 100 00 Made cash sale 5 6 7 8 9 10 11 Example: Made $100 cash sale 100 00

GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Cash Sales PR DEBIT CREDIT 100 GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Cash Sales PR DEBIT CREDIT 100 00 Made cash sale 5 6 7 8 9 10 11 What if this sale had been made on account? 100 00

GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Accts. Rec. /Customer PR DEBIT CREDIT GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Accts. Rec. /Customer PR DEBIT CREDIT 100 00 5 6 7 8 9 10 11 We would debit the Accounts Receivable account instead of Cash.

GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Accts. Rec. /Customer PR DEBIT CREDIT GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION Accts. Rec. /Customer PR DEBIT CREDIT 100 00 5 6 7 8 9 10 11 Customer’s name is entered after Accounts Receivable in the journal.

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Accts. Rec. /Customer Sales PR DEBIT CREDIT 100 00 Made credit sale The Sales account is credited because a sale has been made (even though the business has not yet been paid for the merchandise). 100 00

SALES TAX PAYABLE LIABILITY account used to record the taxes imposed on sales and SALES TAX PAYABLE LIABILITY account used to record the taxes imposed on sales and owed to the taxing authority. SALES TAX PAYABLE DR. CR. + The account is credited for the amount of tax imposed on the sales.

SALES TAX PAYABLE LIABILITY account used to record the taxes imposed on sales and SALES TAX PAYABLE LIABILITY account used to record the taxes imposed on sales and owed to the taxing authority. SALES TAX PAYABLE DR. CR. + The account is debited when the tax is paid to the proper taxing authority.

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Example: A cash sale for $100 plus 5% sales tax. PR DEBIT CREDIT

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Cash PR DEBIT CREDIT 105 00 Sales Tax would be $5 ($100 x 5%) Therefore, cash received would be $105. ($100 selling price + $5 tax)

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Cash Sales PR DEBIT CREDIT 105 00 Sales is credited for the selling price, not the amount of cash received. 100 00

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION PR DEBIT CREDIT Cash Sales Tax Payable Made cash sale $5 sales tax is credited to Sales Tax Payable. 105 00 100 00 5 00

SALES RETURNS & ALLOWANCES CONTRA-REVENUE account used to record sales returns and sales allowances. SALES RETURNS & ALLOWANCES CONTRA-REVENUE account used to record sales returns and sales allowances. Shown as a deduction from Sales on the Income Statement SALES RETURNS & ALLOWANCES DR. + CR. The account is debited when customer returns merchandise or an allowance is granted.

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION PR DEBIT CREDIT Example: Credit customer, Susan Chang, returns printer cartridges (selling price $40 plus $2 sales tax).

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Sales Returns &Allowances PR DEBIT CREDIT 40 00 Sales Returns & Allowances is debited for the selling price.

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Sales Returns &Allowances Sales Tax Payable PR DEBIT CREDIT 40 00 2 00 Sales Tax Payable is debited for the tax of $2.

GENERAL JOURNAL DATE 1 2 3 4 5 DESCRIPTION PR DEBIT CREDIT Sales Returns GENERAL JOURNAL DATE 1 2 3 4 5 DESCRIPTION PR DEBIT CREDIT Sales Returns &Allowances Sales Tax Payable Accts. Receivable/Chang Issued credit memo for returned merchandise 6 7 8 9 10 11 Accounts Receivable is credited for $42. 40 00 2 00 42 00

SALES DISCOUNTS CONTRA-REVENUE account used to record discounts given to customers who buy merchandise SALES DISCOUNTS CONTRA-REVENUE account used to record discounts given to customers who buy merchandise on account to encourage prompt payment. SALES DISCOUNTS DR. + CR. The account is debited for the amount of the Cash Discount at the time of payment.

CREDIT TERMS 2/10, n/30 2% discount off sales price CREDIT TERMS 2/10, n/30 2% discount off sales price

CREDIT TERMS 2/10, n/30 If paid within 10 days CREDIT TERMS 2/10, n/30 If paid within 10 days

CREDIT TERMS 2/10, n/30 Or the total amount is due CREDIT TERMS 2/10, n/30 Or the total amount is due

CREDIT TERMS 2/10, n/30 In 30 days CREDIT TERMS 2/10, n/30 In 30 days

CREDIT TERMS 1/10, n/30 1% off if paid in 10 days or Total amount CREDIT TERMS 1/10, n/30 1% off if paid in 10 days or Total amount due in 30 days.

CREDIT TERMS 2/eom, n/60 2% off if paid before the end of the month CREDIT TERMS 2/eom, n/60 2% off if paid before the end of the month or Total amount due in 60 days.

CREDIT TERMS 3/10 eom, n/60 3% off if paid within 10 days after the CREDIT TERMS 3/10 eom, n/60 3% off if paid within 10 days after the end of month or Total amount due in 60 days.

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION PR DEBIT CREDIT Example: Merchandise was sold for $100 with credit terms of 2/10, n/30, and cash is received within the discount period.

GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION PR DEBIT CREDIT Cash Sales Discounts GENERAL JOURNAL DATE 1 2 3 4 DESCRIPTION PR DEBIT CREDIT Cash Sales Discounts 5 6 7 8 9 10 11 $100 sale x 2% discount 98 00 2 00

GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 GENERAL JOURNAL DATE 1 2 3 4 5 6 7 8 9 10 11 DESCRIPTION Cash Sales Discounts Accts. Receivable/Cust. Received cash on account PR DEBIT CREDIT 98 00 2 00 100 00

Income Statement Sales Less: Sales returns and allowances Sales discounts $200 140 Sales Returns Income Statement Sales Less: Sales returns and allowances Sales discounts $200 140 Sales Returns & Allowances and Sales Discounts are deducted from Sales in the Revenue section of the Income Statement. $38, 500 340

Income Statement Sales Less: Sales returns and allowances Sales discounts Net Sales $200 140 Income Statement Sales Less: Sales returns and allowances Sales discounts Net Sales $200 140 $38, 500 340 $38, 160

SALES TRANSACTIONS • April 4 Made sale no. 133 C on account to Enrico SALES TRANSACTIONS • April 4 Made sale no. 133 C on account to Enrico Lorenzo, $1, 520 plus $76 sales tax • April 10 Made sale no. 134 C on account to Brenda Let’s review the Myers, $40 plus $22 sales tax General Journal entries no. 105 D • April 18 Made sale for these on account to Edith transactions. Walton, $980 plus $49 sales tax • April 21 Made sale no. 202 B on account to Susan Chang, $620 plus $31 sales tax • April 24 Made sale no. 162 A on account to Heidi Schwitzer, $1, 600 plus $80 sales tax

GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR DEBIT CREDIT 1, 596 00 Sales Tax Payable sale no. 133 C 5 6 7 8 9 10 11 4 lines are used to prepare one journal entry!! 1, 520 00 76 00

GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR GENERAL JOURNAL 1 2 3 4 DATE DESCRIPTION Apr. 4 Accts. Receivable/E. Lorenzo PR DEBIT CREDIT 1, 596 00 1, 520 00 Sales 76 00 Sales Tax Payable sale no. 133 C 5 6 10 Accts. Receivable/B. Myers 7 Sales 8 9 Sales Tax Payable sale no. 134 C 10 11 462 00 440 00 22 00

GENERAL JOURNAL continued DATE 12 13 14 DESCRIPTION 18 Accts. Receivable/E. Walton PR DEBIT GENERAL JOURNAL continued DATE 12 13 14 DESCRIPTION 18 Accts. Receivable/E. Walton PR DEBIT CREDIT 1, 029 00 980 00 Sales Tax Payable 15 16 sale no. 105 D 17 21 Accts. Receivable/S. Chang 49 00 18 Sales 19 Sales Tax Payable sale no. 202 B 20 21 22 651 00 620 00 31 00

GENERAL JOURNAL continued DATE 23 24 25 26 27 28 29 30 31 32 GENERAL JOURNAL continued DATE 23 24 25 26 27 28 29 30 31 32 33 DESCRIPTION PR DEBIT CREDIT 24 Accts. Receivable/H. Schwitzer 1, 680 00 1, 600 00 Sales Tax Payable sale no. 162 AAll the entries involved the same accounts!! 80 00

SALES JOURNAL Ø A column for each account involved in “Sales on account” transactions: SALES JOURNAL Ø A column for each account involved in “Sales on account” transactions: o Accounts Receivable (Debit), Sales (Credit), Sales Tax Payable (Credit) Ø Four steps for entering a transaction: o Step #1 Enter Date. o Step #2 Enter Sales number. o Step #3 Enter Customer. o Step #4 Enter Dollar amount.

SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 -Apr 4 133 C Enrico Lorenzo 1, 596 2 3 4 The whole transaction is 5 6 7 8 9 10 11 Page 6 Sales Tax Credit Pay. Credit 1, 520 recorded on ONE line. Account names are not entered. 76

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 24 162 A Heidi Schwitzer PR Accts. Rec. Debit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 6 7 8 9 10 11 Page 6 Sales Tax Credit Pay. Credit Now let’s look at posting from the Sales Journal. 1, 600 31 80

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 24 162 A Heidi Schwitzer 1, 596 5, 160 258 7 8 9 10 11 Step #1 a Total the amount columns.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 24 162 A Heidi Schwitzer 1, 596 5, 160 258 7 8 9 10 11 Step #1 b Verify that the total of the debit column equals the total of the credit columns.

SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 Page 6 Sales Tax Credit Pay. Credit 6 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 24 162 A Heidi Schwitzer 1, 596 5, 160 258 7 8 9 10 11 Debits $5, 418 Credits $5, 418

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 24 162 A Heidi Schwitzer 1, 596 5, 160 258 7 8 9 10 11 Step #1 c Rule the columns.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang 5 6 PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 5, 418 24 162 A Heidi Schwitzer 1, 596 5, 160 258 7 8 9 10 11 Let’s post the Accounts Receivable total.

FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM 20 -Apr. 1 Balance PR DR. 30 Step #2 Enter the date. 12, 000

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 5, 418 Step #3 Enter the amount.

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 5, 418 Step #4 Enter the new balance. 17, 418

FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE FOUR-COLUMN ACCOUNT Account: DATE ITEM 20 -Apr. 1 Balance 30 Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE PR DR. 12, 000 S 6 5, 418 17, 418 Step #5 Enter “S” for Sales Journal and the journal page number.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer Step #6 Enter the account number below the column total.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) Steps #2 - #6 will be repeated for the Sales and Sales Tax Payable columns. (231)

SALES JOURNAL Date Sale No. To Whom Sold PR Page 1 Accts. Receivable Debit/Sales SALES JOURNAL Date Sale No. To Whom Sold PR Page 1 Accts. Receivable Debit/Sales Credit 1 2 3 4 5 6 7 8 9 10 11 A company that does not charge sales tax, such as a wholesaler, will use a single column Sales Journal.

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) Each transaction must also be posted to the Accounts Receivable ledger. (231)

ACCOUNTS RECEIVABLE LEDGER Ø A separate “subsidiary” ledger Ø Individual accounts receivable accounts for ACCOUNTS RECEIVABLE LEDGER Ø A separate “subsidiary” ledger Ø Individual accounts receivable accounts for each customer Ø Often numbered Ø Filed either alphabetically or numerically Ø Accounts Receivable account in the general ledger is the “controlling account. ”

Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 DATE 20 -Apr. 4 ITEM PR DEBIT S 6 CREDIT 1, 596 4 Step #1 Enter the date. 4 Step #2 Enter the amount. 4 Step #3 Update the balance. 4 Step #4 Enter “S” (Sales Journal) and “ 6” (page number) in the PR column. BALANCE 1, 596

SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 SALES JOURNAL Date Sale No. To Whom Sold PR Accts. Rec. Debit 1 20 -Apr 4 133 C Enrico Lorenzo ( / ) 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang Page 6 Sales Tax Credit Pay. Credit 1, 596 1, 520 76 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer (401) A check mark is entered to indicate the transaction has been posted to the Accounts Receivable ledger. (231)

SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C SALES JOURNAL Date Sale No. To Whom Sold 1 20 -Apr 4 133 C Enrico Lorenzo 2 10 134 C Brenda Myers 3 18 105 D Edith Walton 4 21 202 B Susan Chang PR Accts. Rec. Debit Page 6 Sales Tax Credit Pay. Credit (/) 1, 596 1, 520 76 (/) (/) 462 1, 029 651 1, 680 440 980 620 22 49 1, 600 31 80 6 5, 418 5, 160 258 7 (122) 5 8 9 10 11 24 162 A Heidi Schwitzer ( / ) (401) The other sales are posted to the Accounts Receivable ledger in the same manner. (231)

GENERAL JOURNAL 1 2 3 4 5 DATE DESCRIPTION May 5 Sales Returns &Allow. GENERAL JOURNAL 1 2 3 4 5 DATE DESCRIPTION May 5 Sales Returns &Allow. Sales Tax Payable Accts. Rec. /S. Chang PR DEBIT CREDIT 40 00 2 00 Returned Merchandise Credit Memo #72 6 7 8 9 10 11 Now let’s look at the posting for a Sales Return entry. 42 00

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 5 Sales Returns &Allow. Sales Tax Payable Accts. Rec. /S. Chang PR DEBIT CREDIT 40 00 401. 1 2 00 Returned Merchandise Credit Memo #72 Sales Returns and Allowances is posted in the normal manner. Its account number is recorded in the PR column. 42 00

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 5 Sales Returns &Allow. Sales Tax Payable Accts. Rec. /S. Chang PR DEBIT CREDIT 40 00 401. 1 231 2 00 Returned Merchandise Credit Memo #72 Sales Tax Payable is also posted in the normal manner. Its account number is recorded in the PR column. 42 00

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 5 Sales Returns &Allow. PR DEBIT CREDIT 40 00 401. 1 Sales Tax Payable 231 Accts. Rec. /S. Chang 122 ( / ) 2 00 Returned Merchandise Credit Memo #72 The $42 credit is posted to the Accounts Receivable controlling account and to the Subsidiary ledger account for S. Chang. 42 00

BANK CREDIT CARD SALES Ø Similar to cash sales because cash is available to BANK CREDIT CARD SALES Ø Similar to cash sales because cash is available to the business as soon as an electronic deposit is made at the end of the day Ø Business receives amount of sale. o Less a processing fee

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 6 Cash PR DEBIT CREDIT 100 80 Made a bank credit card sale of $100 (plus $5 tax). The seller will receive cash of $100. 80. ($105 - 4% fee)

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 6 Cash Bank Credit Card Exp. PR DEBIT CREDIT 100 80 4 20 Bank Credit Card Expense is debited for the processing fee.

GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE GENERAL JOURNAL 1 2 3 4 5 6 7 8 9 10 11 DATE DESCRIPTION May 6 Cash Bank Credit Card Exp. Sales Tax Payable Made Credit Card Sale PR DEBIT CREDIT 100 80 4 20 100 00 5 00

CASH RECEIPTS JOURNAL Ø Used to record only cash receipt transactions Ø Includes separate CASH RECEIPTS JOURNAL Ø Used to record only cash receipt transactions Ø Includes separate columns for: o Cash (Debit) o Bank Credit Card Expense (Debit) o Accounts Receivable (Credit) o Sales Tax Payable (Credit) o General (Credit)

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 2 3 4 5 CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 2 3 4 5 6 7 8 9 10 11 EXAMPLE: April 14, received cash on account from Enrico Lorenzo for sale no. 133 C, $1, 596. Page 7 Accts. Rec. Credit

CASH RECEIPTS JOURNAL Date Account Credited PR 1 20 -Apr 14 2 3 4 CASH RECEIPTS JOURNAL Date Account Credited PR 1 20 -Apr 14 2 3 4 5 6 7 8 9 10 11 Step #1 Enter date. General Credit Page 7 Accts. Rec. Credit

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 4 5 6 7 8 9 10 11 Step #2 Enter name of account credited.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 This column is used for two purposes: 4 5 6 7 8 9 10 11 1. To identify the customer name for any collection on account. This column is used whenever the Accounts Receivable Credit column is used. 2. To enter the appropriate account name whenever the General Credit column is used.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 3 4 5 6 7 8 9 10 11 Step #3 Enter the dollar amounts. Page 7 Accts. Rec. Credit 1, 596

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 1, 596 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 4 5 6 7 8 9 10 11 Cash was also received on account on April 20 th and 28 th. Page 7 Accts. Rec. Credit 1, 596 462

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 5 6 7 8 9 10 11 PR General Credit Page 7 Accts. Rec. Credit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 6 7 8 9 10 11 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 5 6 7 8 9 10 11 Now let’s journalize cash sales for April 30 th of $3, 600 plus tax of $180. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 6 7 8 9 10 11 This column is left blank for cash sales. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 180 5 6 7 8 9 10 11 Page 7 Cash Debit 3, 600 + 180 = 3, 780 Total Credits = Total Debits

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 7 8 9 10 11 Bank credit card sales are similar to cash sales, no entry is made in the “Account Credited” column. 1, 596 462 1, 029

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 180 2, 500 6 7 8 9 10 11 Page 7 Cash Debit Bank Credit Card Sales of $2, 500 were made this month.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 2, 500 180 125 6 7 8 9 10 11 Page 7 Cash Debit Sales Tax on these sales was $125.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 3, 600 2, 500 180 125 100 6 7 8 9 10 11 Page 7 Cash Debit The service charge on these bank credit card sales was $100.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 2 3 4 5 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 462 1, 029 3, 780 2, 525 3, 600 2, 500 180 125 100 6 7 8 9 10 11 Page 7 Cash Debit The cash received was $2, 525 [($2, 500 sales + $125 tax) - $100 service chg].

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 6 7 8 9 10 11 Example: April 30, received cash for rent revenue $600. Page 7 Accts. Rec. Credit 1, 596 462 1, 029

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 PR General Credit Page 7 Accts. Rec. Credit 1, 596 462 1, 029 30 6 7 8 9 10 11 We need to credit Rent Revenue and debit Cash.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 462 1, 029 30 6 1, 596 600 7 8 9 10 11 Since there is no column for Rent Revenue, we must use the “General Credit” column.

CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 Rent Revenue 462 1, 029 30 6 1, 596 600 7 8 9 10 11 When the “General Credit” column is used, the “Account Credited” column must identify the specific General Ledger account affected.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 8 9 10 11 1, 596 CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 8 9 10 11 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 7 Sales Tax Bank C C Pay. Credit Exp. Debit 1, 596 2 3 4 6 Sales Credit Page 7 Cash Debit 2, 500 600 180 125 100 600

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit Borrowing money would be recorded in a similar manner.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 10 11

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 600 7 30 Notes Payable 3, 000 8 9 10 11 Page 7 Accts. Rec. Credit On a daily basis, the amounts in the “General Credit” column are posted.

FOUR-COLUMN ACCOUNT Account: RENT REVENUE DATE ITEM 20 -Apr. 1 Balance 30 PR DR. FOUR-COLUMN ACCOUNT Account: RENT REVENUE DATE ITEM 20 -Apr. 1 Balance 30 PR DR. Account No. 412 BALANCE CR. DR. CR. 1, 800 CR 7 600 “CR” for Cash Receipts Journal. 2, 400

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 5 30 Rent Revenue 7 30 Notes Payable 1, 596 462 1, 029 30 6 8 9 10 11 Page 7 Accts. Rec. Credit 412 600 3, 000 General Ledger account number

CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Account Credited Date PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 Notes Payable is posted in the same manner.

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 Page 7 Accts. Rec. Credit 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 3, 600 3, 087 At the end of the month, the columns are totaled.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 100 Next, we verify that the debit columns equal the total of the credit columns. 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 $3, 600 + $3, 087 + $6, 100 + $305 = $13, 092 Credits 3, 087 6, 100 305 100 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 $100 + $12, 992 = $13, 092 Debits DEBITS = CREDITS!!! 100 12, 992

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 6, 100 305 100 Each column total (except General) is posted at the end of the month. 12, 992

FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM FOUR-COLUMN ACCOUNT Account: Account No. 122 BALANCE CR. DR. CR. ACCOUNTS RECEIVABLE DATE ITEM 20 -Apr. 1 Balance PR DR. 12, 000 30 S 6 30 CR 7 5, 418 17, 418 3, 087 14, 331 “CR” for Cash Receipts Journal

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 (122) 6, 100 305 100 12, 992 Account Number indicates total was posted.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 10 11 3, 087 (122) 6, 100 (401) 305 (231) 100 12, 992 (513) (101) Remaining columns are posted in the same manner.

CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C CASH RECEIPTS JOURNAL General Accts. Rec. Credit 1 Sales Credit Sales Tax Bank C C Pay. Credit Exp. Debit Page 7 Cash Debit 1, 596 462 1, 029 2 3 4 1, 596 462 1, 029 3, 780 2, 500 3, 600 5 2, 500 180 125 100 6 600 7 3, 000 8 9 3, 600 3, 087 ( /) (122) 10 11 6, 100 (401) 305 (231) Check mark indicates the column total is not posted. 100 12, 992 (513) (101)

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit CASH RECEIPTS JOURNAL Date Account Credited PR General Credit Page 7 Accts. Rec. Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 3, 600 Postings to the subsidiary Accounts Receivable ledger are made daily. 3, 087

Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 Name: ACCOUNTS RECEIVABLE LEDGER Enrico Lorenzo Address: 5240 Tousley Court, Indianapolis, IN 46224 -5678 DATE 20 -Apr. 4 14 ITEM PR DEBIT S 6 CR 7 CREDIT 1, 596 BALANCE 1, 596

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 PR General Credit Page 7 Accts. Rec. Credit ( /) 1, 596 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 3, 600 Check mark indicates transaction was posted to the Accounts Receivable subsidiary ledger. 3, 087

CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 CASH RECEIPTS JOURNAL Date Account Credited 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 PR General Credit Page 7 Accts. Rec. Credit ( /) 1, 596 ( /) 462 1, 029 5 30 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 3, 000 8 9 10 11 3, 600 The payments by Brenda and Edith are posted in the same manner. 3, 087

CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico CASH RECEIPTS JOURNAL Date Account Credited PR General Credit 1 20 -Apr 14 Enrico Lorenzo 2 20 Brenda Myers 3 28 Edith Walton 4 30 ( /) 5 30 ( /) 6 30 Rent Revenue 412 600 7 30 Notes Payable 201 Page 7 Accts. Rec. Credit 3, 000 8 9 10 11 ( /) 1, 596 ( /) 462 1, 029 3, 600 Check mark is entered into the PR column for cash sales and bank credit card sales. 3, 087

SCHEDULE OF ACCOUNTS RECEIVABLE Ø Prepared to verify that the sum of the accounts SCHEDULE OF ACCOUNTS RECEIVABLE Ø Prepared to verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance Ø Listing of customers and their balances Ø Usually prepared at the end of the month Ø Total of the balances listed is compared with the balance in the Accounts Receivable account.

Northern Micro Schedule of Accounts Receivable April 30, 20 -Helen Avery Susan Chang Heidi Northern Micro Schedule of Accounts Receivable April 30, 20 -Helen Avery Susan Chang Heidi Schwitzer Ken Ulmet Vivian Winston $2, 302 651 3, 563 3, 315 4, 500 $14, 331 This should be the balance in the Accounts Receivable controlling account.

ERRORS Ø If the Schedule of Accounts Receivable total and the Accounts Receivable balance ERRORS Ø If the Schedule of Accounts Receivable total and the Accounts Receivable balance do not agree: o Step 1 Verify the total of the schedule. o Step 2 Verify the postings to the accounts receivable ledger. o Step 3 Verify the postings to the Accounts Receivable in the general ledger.