![]() ![]() Note there is a single column for both the debit to Accounts Receivable and the credit to Sales, although we need to post to both Accounts Receivable and Sales at the end of each month. Figure 7.15 shows an example of a sales journal. Because every credit sales transaction is recorded in the same way, recording all of those transactions in one place simplifies the accounting process. Selling on credit always requires a debit to Accounts Receivable and a credit to Sales. The sales journal is used to record sales on account (meaning sales on credit or credit sale). Jones for $500 for work you performed last week, which journal would you use to record receipt of the amount they owed you? What would be recorded? The Sales Journal For a refresher on perpetual versus periodic and related accounts such as freight-in, please refer to Merchandising Transactions. Another difference is that the perpetual method will include freight charges in the Inventory account, while the periodic method will have a special Freight-in account that will be added when Cost of Goods Sold will be computed. ![]() In the purchases journal, using the perpetual method will require we debit Inventory instead of Purchases. The main difference between special journals using the perpetual inventory method and the periodic inventory method is that the sales journal in the perpetual method, as you have seen in the prior examples in the chapter, will have a column to record a debit to Cost of Goods Sold and a credit to Inventory. Thus, in addition to the general journal, we also have the sales journal, cash receipts journal, purchases journal, and cash disbursements journals. We would enter these four types of transactions into their own journals, respectively, rather than in the general journal. People soon realized that certain types of transactions occurred more frequently than any other types of transaction, so to save time, they designed a special journal for each type that occurs frequently (e.g., credit sales, credit purchases, receipts of cash, and disbursements of cash). If a company had many transactions, that meant many journal entries to be recorded in the general journal. Years ago, all accounting record keeping was manual. The transactions themselves end up on transaction files rather than in paper journals, but companies still print or make available on the screen something that closely resembles the journals. Now that most businesses use digital technology, the step of posting to journals is performed by the accounting software. When accountants used a paper system, they had to write the same number in multiple places and thus could make a mistake. Accounting information systems were paper based until the introduction of the computer, so special journals were widely used. ![]()
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