Special Journals

Topics: General ledger, Bookkeeping, Accounts receivable Pages: 2 (323 words) Published: October 20, 2010
Checkpoint: Subsidiary Ledgers and Special Journals

The advantages of using the four different special journals are you are able to post the total in the journal that it corresponds to one time at the end of the month. You are also able to have different people or departments handle the journal that pertains to them. By doing it this way, the accounting department will have better controls and there will be no conflicting responsibilities.

The cash receipts journal is used when you have a debit to cash. You do not have to write it each time you have a debit to cash. You are able to write the total. The entry to cash has equal debits and credits. The sales journal is used for all sales of merchandise on account. The entries debit accounts receivables and credits sales. The purchase journal is used for all purchases of merchandise on account. The entries debit the purchases and credits accounts payables. Finally, the cash disbursement journal is used for all cash payments. Each cash payment entry credits cash and has equal debits and credits. | |

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A subsidiary ledger contains the details to support a specific general ledger account. The purpose is to provide quick access to a customer’s account activities and balance.

The control account is a summary account in the general ledger that gives the total of sales and purchases. The purposed of the control account is to keep the general ledger free of a lot of details. It will still allow the balance to be correct for the financial statements.

The accounts receivables and accounts payables general ledger accounts may act as a control accounts for a subsidiary ledger.

The advantages of using the subsidiary ledgers are they provide current information on specific account balances. It also, provides the general ledger to not have a lot of extra details. It also helps in finding errors and helps with dividing the recordkeeping task.
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