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Chapter 9
Accounting Information Systems
Purchases Journal:
This is similar to the sales journal, but is used to record all purchases (products
or services) made on account.
Cash Payments Journal:
This journal is used to record all cash payments made by the business (e.g.
rent and wages expense) including payments made to suppliers.
Cash Receipts Journal:
This journal is used to record all cash deposits (e.g. cash sales) and
collections from outstanding accounts receivable.
The
general journal
is the journal that has been used throughout the book up until this point. It is
used to record any entry that does not belong in one of the special journals.Typical entries recorded
in the general journal include
• purchase and sales returns
• adjustments
• correcting entries
subsidiary ledgers
Subsidiary ledgers
(also called
subledgers
) are used to provide details that are not kept in the general
ledger because too much information will clutter up the general ledger accounts. For example, a
company usually deals with many suppliers and customers at the same time and certain information
about each supplier and customer is important to the accounting function.This information includes
invoice numbers and amounts, dates of purchases or sales and terms of the purchase or sale.Thus, the
accounts receivable account in the general ledger has a subledger for each individual customer, and
the accounts payable account in the general ledger has a subledger for each individual supplier.This
is illustrated in Figure 9.3.
Transactions are initially recorded in one of the five journals listed above and are then posted to the
general ledger or the subledgers as needed.The subledgers are usually updated after each transaction,
while the general ledger is usually updated at the end of the period, such as the end of the month.
Since subledger accounts only contain details about specific customers or suppliers and are not used
in preparing financial statements they are not assigned account numbers.
The accounts receivable account in the general ledger is a control account for the individual accounts
in the accounts receivable subledger. A
control account
keeps track of the grand total of the amounts
in the subledger. For example, suppose a company has the following list of customers who each owe
a certain amount
• Customer A owes $400
• Customer B owes $500
• Customer C owes $600
Journal
Page 1
Date account title and
explanation
Pr Debit credit
