Iv. Lesson Proper WK 8

BESTLINK COLLEGE
OF THE PHILIPPINES
FINANCIAL ACCOUNTING REPORTING
Special Journals
IV. LESSON PROPER
LET’S BEGIN
Based on the preliminary activities, what did you notice about it?
_______________________________________________________
CONGRATULATIONS!
You may now proceed to the lesson.
Source:
Lesson 1 – Accounting System
An accounting system is the combination of personnel, records, and procedures

that a business uses to meet its need for financial data, every accounting
system has these components but theses systems can handle efficiently, only a
few transactions per period. Accounting systems cope with heavy transaction
loads in two ways one is specialization and the other one is computerization.
Specialization comes when we deal with similar transactions group to speed
the process. We computerize to journalize, post, and prepare reports faster and
more reliably.
Source: Cabrera Elenita; Ledesma, Ester; and Lupisan, Ma. Concepcion “FINANCIAL ACCOUNTING AND REPORTING” GIC Enterprises & Co., Inc. Copyright 2020
Valx, Conrado; Peralta Jose; Valix Christian Aries “FINANCIAL ACCOUNTING AND REPORTING” GIC Enterprises & Co., Inc. Copyright 2020
Lesson 2 – The need for special journals
Special journals make summary posting possible. Summary posting is the

posting of a column total from a special journal to the ledger. A business with
numerous special journals may even assign different employees to be in charge
of a particular special journal and its summary posting.
The majority of the transactions of a merchandising firm can generally be
broken down into four categories- sales on credit, purchases on credit, cash
receipts, and cash payments. Thus a special journal may be used for each
category.
Lesson 3 – Types of Special Journals
The following are special journals commonly used by merchandising firms:
 Sales Journal - is used to record all sales of merchandise on credit

 Purchases journal – is used to record all purchases of merchandise on credit
 Cash receipts Journal – is used to record any transactions involving the
receipt of money.
 Cash payments journal – is used to record all payments of cash
Lesson 4 – Preparation of Special Journals
Sales Journal
Recall that each sale of merchandise on credit is recorded as a debit to

accounts receivable and a credit to sale. There is only one column in the sales
journal to enter the amount of each sale of merchandise on credit at the end of
the period. The column total is posted as a debit to Accounts Receivable and a
credit to Sales. In addition, an extra column is provided to record the invoice
number of each sale, so that lengthy of each entry is necessary
Purchase Journal
In its most simplified form, a purchases journal includes a column for transaction dates,
a column for the name of the vendors from whom the purchase was made (account
credited), a column for the invoice date, a column to put a check mark to indicate the
amount has been posted to the subsidiary ledger, and an amount column. At the end of
the day, amounts are posted to the individual vendors’ accounts in the accounts payable
subsidiary ledger. At the end of the month, the amount column is totaled and posted as
debit to the purchase account and credit to the accounts payable control account in the
general ledger. Any time transactions occur frequently, columns may be added to the
purchase journal or to any other special journals to save posting time.
Cash Receipts Journal
Even if only a partial payment is received, the transaction is recorded in the cash receipts journal
(CRJ) A CRJ usually has multiple columns. It must always have a debit column for cash. If sales
discount are frequently given by a company, a debit column for sales discount can be included. The
number of columns needed in the CRJ is determined by the frequency of transactions for which
money is received. If the business is involved in a merchandising columns are usually included for
sales (to record cash sales), and for account receivable (to record receipt of cash payment for sales
on credit). The account to which the amount to be credited is entered in the account column. As
with any special Journal, summary posting can be done at the end of each month. Other accounts
debit and credit columns can be included and used for transactions that occur infrequently, such as
additional investment of cash in a business or receipt of cash notes receivable. The name of the
other account to be debited or credited is entered in the account column. Because the other
accounts columns include a number of different accounts, a summary posting cannot be made. It is
necessary to post the individual accounts from the Other Accounts columns directly to the general
ledger, inserting the account number in the posting reference column of the journal. The totals in
the CRJ are checked at the end of the period. The total of the debit columns should equal the total
of the credit columns.
Cash Payments Journal
The number of columns to be provided in the cash payments (CPJ) is determined by the
kind of transaction to be recorded and the frequency of their occurrence. A credit column
for Cash is always necessary. Most purchases are made on account, so an Accounts
Payable debit column is usually included. The account to be debited in the accounts
payable subsidiary ledger is entered in the Account column. A business that does not
use the method of recording purchases should include Purchase Discounts credit
columns for Other Accounts are included for transactions that occur infrequently. The
other account to be debited or credited in the Account column. Amounts in the Other
Accounts columns are posted individually. There is also a column included to record the
number of the check used to make the payment.
We had just finished the discussion about Special Journals. Let’s
move on to the next higher level of activity/ies or exercise/s that
demonstrate your potential skills/knowledge of what you have
learned.
Source:

Iv. Lesson Proper WK 8

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BESTLINK COLLEGE

An accounting system is the combination of personnel, records, and procedures

Special journals make summary posting possible. Summary posting is the

The following are special journals commonly used by merchandising firms:

 Sales Journal - is used to record all sales of merchandise on credit

Recall that each sale of merchandise on credit is recorded as a debit to

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