APPENDIX I

subsidiary ledgers and special journals

Summary of Questions by Objectives and Bloom’s Taxonomy

SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE

Note: TF = True-False Ex = Exercise Ma = Matching

CHAPTER LEARNING OBJECTIVES

1. Describe the nature and purpose of a subsidiary ledger. A subsidiary ledger is a group of accounts with a common characteristic. It facilitates the recording process by freeing the general ledger from details of individual balances.

2. Record transactions in special journals. Companies use special journals to group similar types of transactions. In a special journal, generally only one line is used to record a complete transaction.

In posting a multi-column journal:

(a) Companies post all column totals except for the Other Accounts column once at the end of the month to the account title specified in the column heading.

(b) Companies do not post the total of the Other Accounts column. Instead, the individual amounts comprising the total are posted separately to the general ledger accounts specified in the Account Credited (Debited) column.

(c) The individual amounts in a column posted in total to a control account are posted daily to the subsidiary ledger accounts specified in the Account Credited (Debited) column.

TRUE-FALSE STATEMENTS

1. A subsidiary ledger is a group of control accounts that provides information to the managers for controlling the operation of the company.

2. An accounts receivable subsidiary ledger has all the detailed information about the cash sales to individual customers.

3. The accounts payable subsidiary ledger provides detailed information about amounts owed to creditors.

4. The total of the individual account balances in the accounts receivable subsidiary ledger should agree with the total of the individual account balances in the accounts payable subsidiary ledger.

5. Control accounts are always located in the general ledger.

6. A control account and subsidiary ledger can be established for inventory.

7. A subsidiary ledger provides up-to-date information on specific account balances.

8. An advantage of using a subsidiary ledger is that one employee must post to both the subsidiary ledger and the general ledger.

9. Special journals are used to record unique transactions that do not occur very often.

10. A cash receipts journal can be used to record all transactions involving cash coming into the business, regardless of the source.

11. The cash payments journal only has one column because all entries recorded in this journal require a credit to the Cash account.

12. A cash payments journal should not be used to record transactions that require payment by check.

13. If a transaction cannot be recorded in a special journal, it indicates that the company should adopt an electronic accounting system.

14. A debit column for Sales Discounts may be found in the cash receipts journal.

15. A single-column purchases journal is used to record purchases of merchandise on account.

16. Using special journals can save time in posting because column totals are often posted rather than individual entries.

17. The Reference column in a sales journal is used to indicate the general ledger account number when the entry is posted.

18. Postings are generally made more frequently to the general ledger control accounts than to the individual accounts in the subsidiary ledgers.

19. The amounts appearing in the Inventory column of the cash payments journal are posted individually to the accounts in the accounts payable subsidiary ledger.

20. Transaction amounts recorded in the general journal are never posted to accounts in the subsidiary ledger.

Answers to True-False Statements

MULTIPLE CHOICE QUESTIONS

21. The balance of a control account in the general ledger

a. must always be zero.

b. must equal the amount of total assets.

c. is always greater than the composite balance of individual accounts in a related subsidiary ledger.

d. must equal the composite balance of individual accounts in a related subsidiary ledger.

22. A subsidiary ledger is

a. used in place of the general ledger if the general ledger is destroyed or stolen.

b. a group of accounts used by branches and subsidiaries of a corporate business.

c. a group of accounts with a common characteristic that provides detailed information about a control account in the general ledger.

d. used to post excess transactions if a general ledger account becomes full during an accounting period.

23. A subsidiary ledger frees the general ledger from details of

a. individual balances.

b. external transactions.

c. internal transactions.

d. the control account.

24. A company would not likely use subsidiary ledgers for

a. inventory.

b. retained earnings.

c. equipment.

d. accounts receivable.

25. Postings are made daily to subsidiary ledgers so that

a. employees are kept busy.

b. debits equal credits.

c. individual account information is kept current.

d. the control account will balance to the subsidiary ledger.

26. A sales journal is used to record

a. only cash sales of merchandise.

b. sales of all assets on credit and for cash.

c. only credit sales of merchandise.

d. credit sales of merchandise, sales returns and allowances, and sales discounts.

27. If a transaction cannot be recorded in a special journal

a. the company must refuse to enter into the transaction.

b. it is recorded in the general journal.

c. it is recorded directly in the accounts in the general ledger.

d. it is recorded as an adjustment on the worksheet.

28. The one characteristic that all entries recorded in a cash receipts journal have in common is

a. a credit to the Cash account.

b. that they all represent collections from customers.

c. that they originate from the sales of merchandise.

d. a debit to the Cash account.

29. A single-column purchases journal indicates that

a. only purchases of merchandise on account can be recorded.

b. all purchases of merchandise can be recorded.

c. all acquisitions on account can be recorded.

d. another column must be added so that debits and credits can be recorded.

30. The one characteristic that all entries recorded in a multiple-column purchases journal have in common is a

a. credit to the Cash account.

b. debit to the Cash account.

c. debit to the Accounts Payable account.

d. credit to the Accounts Payable account.

31. A company which uses special journals should record a transaction involving the purchase of merchandise for cash in a

a. single-column purchases journal.

b. multiple-column purchases journal.

c. cash payments journal.

d. general journal.

32. If merchandise from a cash sale is returned by a customer for a refund, the sales return is recorded in the

a. general journal.

b. cash receipts journal.

c. cash payments journal.

d. sales journal.

33. Which of the following is not a special journal?

a. Sales journal

b. Purchases journal

c. General journal

d. Cash receipts journal

34. Correcting entries are journalized in

a. a special journal.

b. the general journal.

c. the general ledger.

d. a correcting journal.

35. Adjusting entries are recorded

a. only on the work sheet.

b. only in the general ledger.

c. in the general journal.

d. in the special journals.

36. If a transaction cannot be recorded in a special journal, it is

a. not recorded.

b. a correcting entry.

c. recorded in the general journal.

d. an error.

37. A company uses a sales journal, cash receipts journal, purchases journal, cash payments journal, and a general journal. A cash sales return would be recorded in the

a. sales journal.

b. cash receipts journal.

c. cash payments journal.

d. general journal.

38. The entries in a sales journal will show

a. all sales of merchandise.

b. the cash sales of the company.

c. the credit sales of merchandise.

d. all sales of the company.

39. Entries in a sales journal

a. are made from sales invoices.

b. will indicate the invoice number in the Reference column of the sales journal.

c. will occupy two lines of the sales journal.

d. indicate either a Cash debit or Accounts Receivable debit.

40. Journalizing in a sales journal will not

a. require a debit to Accounts Receivable.

b. show a sales invoice number.

c. affect the Reference column of the journal.

d. include a credit to the Sales Revenue account.

41. If a company purchases merchandise for cash, the transaction should be recorded in the

a. purchases journal.

b. general journal.

c. cash payments journal.

d. sales journal.

42. Cash from sales of merchandise will be recorded in the

a. purchases journal.

b. sales journal.

c. cash receipts journal.

d. general journal.

43. Debit postings to the individual accounts in an accounts receivable subsidiary ledger generally come from the

a. sales journal.

b. cash receipts journal.

c. purchases journal.

d. cash payments journal.

44. Entries in a sales journal are

a. posted only to accounts in an accounts receivable subsidiary ledger.

b. posted only to accounts in the general ledger.

c. posted to accounts in an accounts receivable subsidiary ledger and to accounts in the general ledger.

d. never posted.

45. Which one of the following columns in a cash receipts journal is not posted in total to an account in the general ledger?

a. Cash column

b. Sales Discounts column

c. Accounts Receivable column

d. Other Accounts column

46. The use of special journals to record transactions

a. eliminates the need for a general ledger.

b. can save time in the posting process.

c. eliminates the need for a general journal.

d. should only be used if the volume of transactions is small.

47. Posting a sales journal to the accounts in the general ledger requires a

a. debit to Cash and a credit to Sales Revenue.

b. debit to Sales Revenue and a credit to Inventory.

c. debit to Accounts Receivable and a credit to Inventory.

d. debit to Accounts Receivable and a credit to Sales Revenue.

48. The entries recorded in the Other Accounts column of a cash payments journal

a. are posted to the accounts payable subsidiary ledger daily.

b. are posted individually to accounts in the general ledger.

c. are not posted individually but are posted as a column total to the general ledger.

d. do not require posting.

49. Proving the equality of the totals in the columns of multiple-column special journals is called

a. posting to the subsidiary.

b. debiting and crediting.

c. footing and crossfooting.

d. updating the master file.

50. If a company records merchandise it returns to suppliers in the general journal, then

a. a posting must be made only to the accounts payable control account.

b. a posting must be made only to the accounts payable subsidiary ledger account.

c. a dual posting must be made.

d. there will be a debit to Inventory.

51. Gable's Wholesale uses a sales journal. An entry in this journal represents a

a. debit to Cash; credit to Sales Revenue.

b. debit to Accounts Receivable; credit to Sales Revenue.

c. debit to Sales Discounts; credit to Cash.

d. debit to Accounts Payable; credit to Sales Returns and Allowances.

52. Which accounts in the general ledger are affected when the monthly posting is made from the sales journal?

a. Accounts Receivable; accounts receivable subsidiary accounts

b. Accounts receivable subsidiary accounts; Sales Revenue

c. Accounts Receivable; Sales Revenue

d. Accounts Receivable; Accounts Payable

53. Which of the following is not a true statement about the daily posting of the sales journal?

a. There is a debit posting to accounts in the accounts receivable subsidiary ledger.

b. There is no credit posting.

c. The reference column in the sales journal is checked when the posting is completed for each entry in the journal.

d. The invoice number supporting the sales transaction is posted to the Reference column in the subsidiary ledger.

54. Evidence that the monthly posting of the sales journal total has been accomplished is indicated by

a. a signature of the accountant doing the posting.

b. a date under the double-line total.

c. the general ledger account numbers under the double-lined total.

d. inspecting the postings in the accounts payable subsidiary ledger.

55. Which of the following economic events would not be recorded in the cash receipts journal?

a. Cash sales of merchandise

b. Collections of accounts receivable

c. Cash from sale of land

d. Cash purchases of merchandise

56. The "Other Accounts" column in a cash receipts journal is also referred to as the

a. miscellaneous column.

b. excess column.

c. sundry accounts column.

d. compound-entry column.

57. The process of totaling the columns of a journal is termed

a. ruling.

b. columnizing.

c. sizing.

d. footing.

58. An (x) below the "Other Accounts" column in a cash receipts journal indicates the

a. total has been posted to the general ledger.

b. total is not posted to the general ledger.

c. column has been footed.

d. column has been crossfooted.

59. Crossfooting a cash receipts journal means

a. the equality of debits and credits in the journal has been proved.

b. each line of the journal has a horizontal total.

c. the columns of the journal have been cross-referenced.

d. all necessary postings have been completed.

60. Which of the following would not be an appropriate heading for a column in the cash receipts journal?

a. Cash

b. Accounts Payable

c. Sales Discounts

d. Sales Revenue

61. Proving the postings of a single-column purchases journal would involve comparing the

a. general ledger posting to Accounts Payable to the debit postings of the accounts receivable subsidiary ledger.

b. general ledger debit posting to Accounts Payable to the general ledger credit posting to Inventory.

c. general ledger credit posting to Accounts Payable to the general ledger debit posting to Inventory.

d. debit postings to the accounts receivable subsidiary ledger to the credit postings to the accounts payable subsidiary ledger.

62. If a company uses a multiple-column purchases journal, which of the following possible headings for debit columns of the journal would not be appropriate?

a. Accounts Payable

b. Inventory

c. Supplies

d. Other Accounts

63. Entries in the cash payments journal are made from

a. sales invoices.

b. purchase invoices.

c. prenumbered checks.

d. canceled checks.

64. The Reference column of a multiple-column cash payments journal after posting

a. will only contain check marks.

b. will be blank.

c. will only contain account numbers.

d. may contain either account numbers or check marks.

65. The Reference column of the accounts in the accounts payable subsidiary ledger after posting may show

a. only P references.

b. CP, P, or G references.

c. G, P, or S references.

d. only CP references.

Answers to Multiple Choice Questions

Exercises

Ex. 66

After Artie Company had completed all posting for the month of December, the sum of the balances in the following accounts payable subsidiary ledger did not agree with the balance of the control account in the general ledger.

Name Aston's

Address 286 Buck Avenue

——————————————————————————————————————————

Date Item Post. Ref. Debit Credit Balance

——————————————————————————————————————————

Dec. 2 P25 2,400 2,400

Name Carson Company

Address 818 Western Avenue

——————————————————————————————————————————

Date Item Post. Ref. Debit Credit Balance

——————————————————————————————————————————

Dec. 1 Balance 7,600

10 CP23 7,600 —

20 P32 3,300 3,300

29 J15 300 3,600

Name Diana Fenn Company

Address 90210 Baker Boulevard

——————————————————————————————————————————

Date Item Post. Ref. Debit Credit Balance

——————————————————————————————————————————

Dec. 1 Balance 9,900

18 CP28 9,900 —

29 P34 12,600 2,700

Ex. 66 (cont.)

Name Maria Lopez

Address 2720 Sommers Avenue

——————————————————————————————————————————

Date Item Post. Ref. Debit Credit Balance

——————————————————————————————————————————

Dec. 8 P27 6,000 6,000

27 P33 8,000 14,000

Name Oster Supplies

Address 1560 Puckett Street

——————————————————————————————————————————

Date Item Post. Ref. Debit Credit Balance

——————————————————————————————————————————

Dec. 1 Balance 8,200

7 P26 5,600 13,800

12 J11 420 12,380

20 CP29 8,000 20,380

The balance in the Accounts Payable control account of $37,380 has been verified as correct. Also, assume that the journal’s references in the Post Ref. columns of the accounts payable subsidiary ledger have been verified as correct.

Instructions

Determine the errors in the preceding accounts payable subsidiary accounts and prepare a corrected schedule of accounts payable.

Ex. 67

On December 1, the accounts receivable control account balance in the general ledger of Mitus Company was $9,000. The accounts receivable subsidiary ledger contained the following detailed customer balances: Acme $1,500, Baker $2,100, Fare $2,600, and Grote $2,800. The following information is available from the company's special journals for the month of December:

Cash Receipts Journal: Cash received from Fare $1,900, from Acme $1,600, from Santos $1,700, and from Baker $1,800.

Sales Journal: Sales to Santos $2,300, to Fare $1,700, to Acme $2,300, and to Grote $2,400.

Additionally, Fare returned defective merchandise for credit for $900. Acme returned defective merchandise for $600, which he had purchased for cash.

Instructions

(a) Using T-accounts for Accounts Receivable Control and the detail customer accounts, post the activity for the month of December.

(b) Reconcile the accounts receivable control account with the subsidiary ledger by preparing a detail list of customer balances at December 31.

Ex. 68

Gates Company maintains four special journals and a general journal to record its transactions. Using the codes, indicate in the space provided the appropriate journal for recording the transactions listed.

Code Journals

S Sales journal

CR Cash receipts journal

CP Cash payments journal

P Single-column purchases journal

G General journal

1. Stockholders invested cash in the business.

2. Purchased store supplies on account.

3. Sold merchandise to customer on account.

4. Purchased a 2-year fire insurance policy for cash.

5. Received a check from a customer as payment on account.

6. Paid for store supplies purchased in transaction 2.

7. Purchased merchandise on account.

8. Issued a credit memorandum to a customer who returned defective merchandise previously sold on account.

9. Purchased office equipment for cash.

10. Made an adjusting entry for store supplies used during the period.

Ex. 69

Sasser Company uses a sales journal, a cash receipts journal, and a general journal to record transactions with its customers. Record the following transactions in the appropriate journals. The cost of all merchandise sold was 70% of the sales price.

July 2 Sold merchandise for $21,000 to B. Stine on account. Credit terms 2/10, n/30. Sales invoice No. 100.

July 5 Received a check for $800 from R. Hyatt in payment of his account.

July 8 Sold merchandise to F. Wendel for $900 cash.

July 10 Received a check in payment of Sales invoice No. 100 from B. Stine minus the 2% discount.

July 15 Sold merchandise for $9,000 to J. Nott on account. Credit terms 2/10, n/30. Sales invoice No. 101.

July 18 Borrowed $25,000 cash from United Bank signing a 6-month, 10% note.

July 20 Sold merchandise for $18,000 to C. Karn on account. Credit terms 2/10, n/30. Sales invoice No. 102.

July 25 Issued a credit memorandum for $600 to C. Karn as an allowance for damaged merchandise previously sold on account. The fair value of the damaged merchandise is $350.

July 31 Received a check from J. Nott for $5,000 as payment on account.

SASSER COMPANY

Sales Journal

S1

——————————————————————————————————————————

Invoice Acct. Rec. Dr. COGS Dr.

Date Account Debited No. Ref. Sales Rev. Cr. Inventory Cr.

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

Ex. 69 (cont.)

SASSER COMPANY

General Journal

G1

——————————————————————————————————————————

Date Explanations Ref. Debit Credit

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

——————————————————————————————————————————

SASSER COMPANY

Cash Receipts Journal

CR1

———————————————————————————————————————————

Sales Accounts Sales Other COGS Dr.

Accounts Cash Discounts Rec. Rev. Accounts Inven. Cr.

Date Credited Ref. Dr. Dr. Cr. Cr. Cr.

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

Ex. 70

Ward Company uses a single-column purchases journal, a cash payments journal, and a general journal to record transactions with its suppliers and others. Record the following transactions in the appropriate journals.

Transactions

Oct. 5 Purchased merchandise on account for $10,000 from Groton Company. Terms: 2/10, n/30; FOB shipping point.

Oct. 6 Paid $7,200 to Federated Insurance Company for a 2-year fire insurance policy.

Oct. 8 Purchased store supplies on account for $700 from Flynn Supply Company. Terms: 2/10, n/30.

Oct. 11 Purchased merchandise on account for $14,000 from Buehler Corporation. Terms: 2/10, n/30; FOB shipping point.

Oct. 13 Issued a debit memorandum for $5,000 to Buehler Corporation for merchandise purchased on October 11 and returned because of damage.

Ex. 70 (cont.)

Oct. 15 Paid Groton Company for merchandise purchased on October 5, less discount.

Oct. 16 Purchased merchandise for $8,000 cash from Clifford Company.

Oct. 21 Paid Buehler Corporation for merchandise purchased on October 11, less merchandise returned on October 13, less discount.

Oct. 25 Purchased merchandise on account for $22,000 from Dooley Company. Terms: 2/10, n/30; FOB shipping point.

Oct. 31 Purchased office equipment for $30,000 cash from Paten Office Supply Company.

WARD COMPANY

Purchases Journal

P1

———————————————————————————————————————————

Inventory. Dr.

Date Account Credited Ref. Accounts Payable Cr.

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

WARD COMPANY

General Journal

G1

———————————————————————————————————————————

Date Explanation Ref. Debit Credit

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

Ex. 70 (cont.)

WARD COMPANY

Cash Payments Journal

CP1

———————————————————————————————————————————

Other Accounts

Account Accounts Payable Inventory Cash

Date Debited Ref. Dr. Dr. Cr. Cr.

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

———————————————————————————————————————————

Ex. 71

Sandy Company uses both special journals and a general journal. The company accountant made the following errors during July.

1. Incorrectly added the credit entries in a customer's account in the accounts receivable subsidiary ledger. The total was listed as $2,690; it should have been $2,790.

2. A remittance of $400 from Tom Short was correctly recorded in the cash receipts journal, but the amount was posted incorrectly to the account of customer Will Short in the subsidiary ledger.

3. A purchase of merchandise on account from Easton Company for $1,000 was incorrectly entered in the purchases journal at $10,000.

4. In the sales journal, the entries were incorrectly added for the month. The monthly total was listed as $24,620; it should have been $24,260.

Instructions

Indicate how each of these errors might be discovered.

Ex. 72

Here are some typical transactions incurred by Harley Company.

1. Purchase of merchandise on account.

2. Collection on account from customers.

3. Payment of employee's wages.

4. Sales of merchandise for cash.

5. Close Income Summary to Retained Earnings.

6. Adjusting entry for depreciation on machinery.

7. Payment of creditors on account.

8. Purchase of office equipment on credit.

9. Sales discount taken on goods sold on credit.

10. Sales of merchandise on account.

11. Purchase of a delivery truck for cash.

12. Return of merchandise purchased on credit.

13. Payment of rent in advance.

14. Adjusting entry for accrued interest expense.

15. Purchase of office supplies for cash.

For each transaction, indicate by the code letter the appropriate journal where the transaction would be journalized.

CR — Cash Receipts Journal

CP — Cash Payments Journal

S — Sales Journal

P — Single-Column Purchases Journal

G — General Journal

Ex. 73

(a) A sales journal will be used for:

Credit Sales Cash Sales Sales Discounts

Yes No Yes No Yes No

(b) A single-column purchases journal will be used for:

Purchase Returns

Cash Purchases Purchases on Account and Allowances

Yes No Yes No Yes No

(c) A multiple-column purchases journal will be used for:

Supplies Purchased Equipment Purchases

Cash Purchases on Account on Account

Yes No Yes No Yes No

(d) A cash payments journal will be used for:

Payments to Purchases Payment of

Creditors Discounts Dividends

Yes No Yes No Yes No

(e) A cash receipts journal will be used for:

Sale of Stock Purchases Discounts Cash Sales

Yes No Yes No Yes No

Ex. 74

Listed here are various column headings that may appear in special journals. Using the following code letters, identify for each column heading (1) the special journal where the column heading would appear, and (2) whether the amounts entered under the column heading would be posted in total, individually, or both in total and individually. (Note: column headings may appear in more than one special journal)

Code: Special Journals Code: Posting

S = Sales journal I = Individual posting

P = Single-column purchases journal T = Total posting

CR = Cash receipts journal B = Both individual and total posting

CP = Cash payments journal

Heading Special Journal Posting

1. Accounts Payable—Cr.

2. Sales—Cr.

3. Sales Discounts—Dr.

4. Merchandise Inventory—Dr.

5. Cash—Cr.

6. Accounts Receivable—Dr.

7. Other Accounts—Cr.

8. Merchandise Inventory—Cr.

9. Accounts Receivable—Cr.

10. Accounts Payable—Dr.

Ex. 75

Horton Company uses four special journals, (cash receipts, cash payments, sales, and purchases journal) in addition to a general journal. On November 1, 2021, the control accounts in the general ledger had the following balances: Cash $12,000, Accounts Receivable $200,000 and Accounts Payable $42,000. Selected information on the final line of the special journals for the month of November is presented here:

Cash Receipts Journal:

Sales Accounts Sales Other Accounts

Cash Discounts Receivable Rev. Cr. C. of G. S. Dr.

Dr. Dr. Cr. Cr. Acct. Ref. Amount Inven. Cr.

? $600 $3,400 $29,000 (X) $1,000 $17,400

Cash Payments Journal:

Other Accounts Accounts

Dr. Payable Supplies Inventory Cash

Acct. Ref. Amount Dr. Dr. Cr. Cr.

(X) $1,600 ? $2,400 $700 $14,600

Purchases Journal:

Accounts Other Accounts

Payable Inventory Supplies Dr.

Cr. Dr. Dr. Acct. Ref. Amount

? $37,000 $1,450 (X) $3,300

Additional Data:

The Sales Journal total was $41,000. A customer returned merchandise for credit for $360, and Horton Company returned store supplies to a supplier for credit for $400.

Instructions

(a) Determine the missing amounts in the special journals.

(b) Determine the balances in the general ledger accounts (Cash, Accounts Receivable, and Accounts Payable) at the end of November.

Ex. 76

Easton Company began business on October 1. The sales journal, as it appeared at the end of the month, follows:

SALES JOURNAL Page 1

———————————————————————————————————————————

Invoice Post.

Date Account Debited Number Ref. Amount

———————————————————————————————————————————

Oct. 5 Donna Miner 10001 275

11 Mike Barr 10002 335

16 Donna Miner 10003 818

19 Laura Cher 10004 147

26 Myron Silas 10005 1,184

2,759

1. Open general ledger T-accounts for Accounts Receivable (No. 112) and Sales (No. 401) and an accounts receivable subsidiary T-account ledger with an account for each customer. Make the appropriate postings from the sales journal. Fill in the appropriate posting references in the sales journal provided.

2. Prove the accounts receivable subsidiary ledger by preparing a schedule of accounts receivable.

Ex. 77

CASH PAYMENTS JOURNAL Page 45

———————————————————————————————————————————

Other Accounts

Ck. Account Accounts Payable Inventory Cash

Date No. Debited Ref. Dr. Dr. Cr. Cr.

———————————————————————————————————————————

2021

Jan. 4 659 M. Tate (a) 4,000 40 3,960

11 660 Prepaid Rent (b) 1,000 1,000

13 661 Inventory (c) 565 565

14 662 Dividends (d) 2,000 2,000

18 663 Welch (e) 1,300 1,300

20 664 Inventory (f) 450 450

29 665 Equipment (g) 3,400 3,400

7,415 5,300 40 12,675

(h) (i) (j) (k)

Using the cash payments journal, identify each of the posting references indicated by a letter, as representing:

(1) a posting to a general ledger account.

(2) a posting to a subsidiary ledger account.

(3) that no posting is required.

Ex. 78

Shown here is a page from a special journal.

1. What is the name of this journal?

2. Give an explanation for each of the transactions in this journal.

3. Explain the following:

(a) the numbers under the bottom lines.

(b) the checks entered into the Ref. column.

(c) the numbers 113 and 416 in the Ref. column.

(d) the (x) below the Other Accounts column.

———————————————————————————————————————————

Sales Accounts Sales Other COGS Dr.

Account Cash Discounts Receivable Rev. Accounts Inventory Cr.

Date Credited Ref. Dr. Dr. Cr. Cr. Cr.

———————————————————————————————————————————

May 27 Ted Roth  980 20 1,000

28 Notes Receivable 113 4,000

Interest Revenue 416 4,480 480

29 370 370 260

31 Don Calb  400 400

6,230 20 1,400 370 4,480 260

(111) (412) (114) (411) (x) (505)(120)