CHAPTER 5

Special Journals 1: Credit

Journals

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 LEARNING OBJECTIVE
• explain the role of special journals and the benefits they bring
to the accounting process
• List the four special journals and identify the transactions
they are used to record
• Record credit purchases of stock in the Purchases Journal
• Post the Purchases Journal to the General Ledger and
Creditors ledger
• Record credit sales of stock in the Sales Journal
• Post the Sales Journal to the General Ledger and Debtors
ledger

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
SPECIAL JOURNALS

• Special journals summarise similar

transactions so that totals can be posted to
the General Ledger at the end of every month
• This reduces the number of ledger entries
required and improves the efficiency of the
recording system

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Special Journals
• Used to record similar types of transactions
• Every transaction must be recorded in a journal
before it is posted to the ledger accounts
CASH CASH
SALES PURCHASES GENERAL
RECEIPTS PAYMENT
JOURNAL JOURNAL
JOURNAL
JOURNAL JOURNAL

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Special Journals

Week 9

CASH CASH
SALES PURCHASES GENERAL
RECEIPTS PAYMENT
JOURNAL JOURNAL
JOURNAL
JOURNAL JOURNAL

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Special Journals

Week 10

CASH CASH
SALES PURCHASES GENERAL
RECEIPTS PAYMENT
JOURNAL JOURNAL
JOURNAL
JOURNAL JOURNAL

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Special Journals

• Any transactions that are unable to be recorded in a

special journal must be recorded in the General
Journal
• The General Journal is used to record all infrequent,
non-cash transactions

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 PURCHASE JOURNAL

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 PURCHASE JOURNAL
• Each transaction is credit purchase of stock and will require the same
debit and credit entries every time it is recorded in the ledger.
• That is :-
• DR STOCK CONTROL
• CR CREDITORS CONTROL

Although repetition is 6
times, it is obvious!!
Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 PURCHASE JOURNAL
1. Recording in Purchase Journal. This step
allows us to
record all
credit
purchases
with just one
entry, not 6 in
each
2. Posting the Purchase Journal to the General Ledger account !!

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 SALES JOURNAL
Entries for Credit Sales
DR Debtors Control
CR Sales Revenue

DR Cost of Sales
CR Stock Control

The above entries are summarized in a SALES JOURNAL

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 SALES JOURNAL

Next step: Posting Sales Journal to General Ledger & Debtors Ledger

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
GENERAL LEDGER
DEBTOR'S CONTROL (A)
DATE CROSS- REFERENCE AMOUNT $ DATE CROSS- REFERENCE AMOUNT $
Oct-31Sales 1800 
 

SALES ( R )
DATE CROSS- REFERENCE AMOUNT $ DATE CROSS- REFERENCE AMOUNT $
Oct-31Debtors Control 1800
 

STOCK CONTROL (A)

DATE CROSS- REFERENCE AMOUNT $ DATE CROSS- REFERENCE AMOUNT $
Oct-01Balance 10000 Oct-31Cost of Sales 1020
Oct-31Creditors Control 1520 

COST OF SALES ( E )
DATE CROSS- REFERENCE AMOUNT $ DATE CROSS- REFERENCE AMOUNT $
Oct-31Stock Control 1020 
 

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 DEBTORS LEDGER

DEBTORS
LEDGER
R. STARR (A)
AMOUNT
DATE CROSS- REFERENCE $ DATE CROSS- REFERENCE AMOUNT $
Oct-02Sales 450 
Oct-14Sales 380 

G. MARTIN (A)
AMOUNT
DATE CROSS- REFERENCE $ DATE CROSS- REFERENCE AMOUNT $
Oct-06Sales 300 
Oct-27Sales 270 

B. EPSTEIN (A)
AMOUNT
DATE CROSS- REFERENCE $ DATE CROSS- REFERENCE AMOUNT $
Oct-20Sales 400 
 

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 SUMMARY

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 CONCEPT 3
ACCOUNTING FOR GST
CHAPTER 4

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 WHAT IS GST?

• The Goods and Services Tax (GST) is a 10% tax

levied by the federal government on most
goods and services, excluding fresh food

• Paid by the end users.

• An entity must have an ABN to register for

GST

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 GST
• GST on sales:-
• Is collected from the customer
• is owed to the government
• It is therefore a liability

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 GST
• GST on purchases:-
• Is paid to the supplier/payee
• is owed by the government
• It is therefore an asset
• Because the GST is ultimately borne
by the end user

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 GST CLEARING A/C
• All GST transactions are summarised in the
GST Clearing account
• The clearing account can be a current asset
or a current liability

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 THE GENERAL JOURNAL

The General Journal is posted to the

General Ledger at the end of the month

© Cambridge University Press 2012

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B