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Chapter 9
Accounting Information Systems
Cash sales are recorded in the cash receipts journal, as shown in Figure 9.8. Because accounts
receivable is not affected, nothing is posted to the subledger accounts. Because the Other column
was not used, no entry is posted to the general ledger at this time. The general ledger is only
updated at the end of the month when the columns are totalled.
Cash Receipts Journal
Page 3
Sales Accounts
Bank
COGS/
Cash Discount Receivable Sales
Loan Other Inventory
Date Account
PR (DR)
(DR)
(CR)
(CR)
(CR)
(CR)
(DR/CR)
Jan 2 Cash Sale
350
350
280
figure 9.8
The transaction on January 4 in Figure 9.9 is an investment into the company by the owner. There
is no column with Owner’s Capital as a heading, so the amount is recorded in the Other column.
The post reference (300) indicates that the amount of the investment shown is immediately
updated to owner’s capital in the general ledger. At the end of the month, the total of the Other
column will not be posted because any amount in this column is posted immediately to the
appropriate ledger account.
Cash Receipts Journal
Page 3
Sales Accounts
Bank
COGS/
Cash Discount Receivable Sales
Loan Other Inventory
Date Account
PR (DR)
(DR)
(CR)
(CR)
(CR)
(CR)
(DR/CR)
Jan 2 Cash Sale
350
350
280
Jan 4 Hanlon, Capital 300 4,000
4,000
figure 9.9
The partial payment from a customer on January 10 shown in Figure 9.10 will immediately update
the subledger account because it affects the accounts receivable account. Since the payment is
made within 10 days of the original sale, the customer receives a 2% discount on the amount paid.
The discount therefore reduces the amount of cash received, but does not reduce the amount of
accounts receivable that is paid off.
Updating the subledger account follows these steps.
1
Transfer the date from the cash receipts journal to the date column in the subledger account.
2
Make a note of the journal and page number in the PR column of the subledger.
3
Transfer the amount of the accounts receivable column to the credit column in the subledger.
4
Indicate the posting is complete by entering a check mark in the PR column in the cash
receipts journal.
