> Why use special journals?
>What are the advantages to using subsidiary ledgers?
> What are the disadvantages to using subsidiary ledgers?
> Does the term “accounting system” always mean a computerized system? Why or why not?
Exercise 1: Match the special journal with its definition:
|a. Cash Receipts Journal||____ 1. Purchases on account|
|b. Cash Disbursement Journal||____ 2. Sales on account|
|c. Sales Journal||____ 3. Cash paid by the company.|
|d. Purchases Journal||____ 4. Cash Received by the company.|
|e. General Journal||____ 5. Adusting, closing and returns.|
Exercise 2: Enter P for Purchases journal, S for Sales journal, CR for Cash Receipts journal, CD for Cash Disbursements, and G for General journal to identify which special journal these transactions would appear:
|a. Purchased supplies for cash||_________|
|b. Customer paid on account||_________|
|c. Borrowed cash from the bank.||_________|
|d. Purchased inventory on account.||_________|
|e. Sold merchandise for cash.||_________|
|f. Returned inventory purchased.||_________|
|g. Paid utility bill.||_________|
|h. Sold merchandise on credit.||_________|
|i. Customer returned merchandise.||_________|
|j. Paid vendor for purchase.||_________|
Exercise 3: The following transactions appeared for Some Company, Inc. Identify which special journal each transaction should be recorded (use S for Sales journal, P for Purchases journal, CR for Cash Receipts journal, CD for Cash Disbursements, and G for General journal).
|Jan 1 Some Company issued $50,000 in stock to investors.|
|Jan 5 Purchase a equipment by paying $15,000 cash.|
|Jan 8 Purchased $2,000 in inventory from Bottle Inc. terms 1/10, N30|
|Jan 10 Sold $2,000 of inventory to ABC Company for $4,000 terms 2/10,N30.|
|Jan 15 Made a partial payment to Bottle Inc. for $1,500.|
|Jan 16 Purchased $1,000 of inventory for cash.|
|Jan 20 Sold $1,000 of inventory to JKL Company for $2,000 terms 2/10, N30.|
|Jan 20 Received full payment for Jan 10 sale to ABC less the discount.|
|Jan 21 JKL Company returned $200 of merchandise for a credit of $400.|
|Jan 25 Purchased $500 of supplies on credit.|
Exercise 4: Using the transactions from Exercise 3, complete the following:
- Create an accounts receivable ledger account and customer ledger for ABC Company and JKL Company.
- Post the appropriate entries to the accounts receivable control ledger (use the individual transactions) and the customer ledgers.
- Prepare a Schedule of Accounts Receivable to prove the balance in accounts receivable.
Exercise 5: Using the transactions from Exercise 3, complete the following:
- Create an accounts payable ledger account and vendor ledger for Bottle Inc..
- Post the appropriate entries to the accounts payable control ledger (use the individual transactions) and the vendor ledger.
- Prepare a Schedule of Accounts Payable to prove the balance in accounts payable.