R Santiago Co Uses Special Journals And A General Journal

R Santiago Co Uses Special Journals And A General Journal The Follo

R Santiago Co. uses special journals and a general journal. The following transactions occurred during May 2014: May 1 R. Santiago invested $40,000 cash in the business. May 2 Sold merchandise for $6,300 cash, with a cost of $4,200. May 3 Purchased merchandise for $7,700 from J. Moskos using check no. 101. May 14 Paid salary to H. Rivera $700 by issuing check no. 102. May 16 Sold merchandise on account to K. Stanton for $900, terms n/30, with a cost of $630. May 22 A check of $9,000 is received from M. Mangini in full for invoice 101; no discount given.

Paper For Above instruction

The task involves preparing a multiple-column cash receipts journal and recording the transactions for May that should be journalized. The transactions include cash investments, sales (both cash and on account), purchases, salary payments, and receipts, which are typical journal entries that require detailed recording in specialized journals such as the cash receipts journal, along with the respective ledger accounts. To accurately record these, understanding the nature of each transaction is critical, including the accounts affected (cash, accounts receivable, sales, cost of goods sold, inventory, salaries payable, etc.) and whether to record debits or credits.

The cash receipts journal serves as a specialized journal to record all cash inflows. Entries in this journal typically involve debiting Cash and crediting either Accounts Receivable or Sales Revenue, depending on the transaction type. For instance, the initial cash investment on May 1 would be recorded as a debit to Cash and a credit to R. Santiago's Capital account. Sale transactions for cash, such as on May 2, would involve debiting Cash and crediting Sales Revenue, while the receipt of full payment from M. Mangini on May 22 would similarly involve debiting Cash and crediting Accounts Receivable or directly settling accounts.

To simplify and streamline financial tracking, R Santiago Co uses special journals to record transactions of a similar nature and a general journal for miscellaneous or adjusting entries. Proper classification ensures accuracy in financial reporting and facilitates easier posting to the general ledger. The preparation of the cash receipts journal requires filling out the columns for date, account credited, reference, cash debit, sales discounts (if applicable), accounts receivable credit, sales revenue credit, other accounts, cost of goods sold debit, and inventory credit. Recording the transactions involves entering the date, selecting the appropriate account credited, and indicating the amount and account type in each relevant column in accordance with accounting principles.

Given the transactions in May, each should be carefully journalized with proper account titles, appropriate amounts, and references. For example, on May 3, purchasing merchandise would not be recorded in the cash receipts journal but in the purchases journal; however, for the scope of this task, focusing on the cash receipts journal emphasizes the transactions involving receipts of cash or reductions of receivables. Accurate and consistent recording in the cash receipts journal helps provide reliable data for financial statements and managerial decision-making.

Paper For Above instruction

In conclusion, preparing a multi-column cash receipts journal for R Santiago Co. involves carefully analyzing each May transaction, determining its impact on cash and receivables, and properly recording each entry in its appropriate column. The journal captures essential information that facilitates subsequent posting to ledger accounts and eventual preparation of financial statements. This systematic approach to journalization ensures accuracy, accountability, and transparency in financial record-keeping, which are vital for the company's financial health and compliance with accounting standards.

References

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