Today, companies increasingly sell products with little expense and effort over the Internet. However, they still need to have procedures and systems for processing online sales transactions. Companies may use an Internet merchant account for credit and debit card payments or an online payment service such as PayPal. Most Internet sales systems make batch transactions daily to provide updated sales and inventory entries for the company’s computer systems.
Security is an important requirement of online sales transactions. Businesses use a card verification service to authenticate credit card security codes and personal identification data to protect themselves from online fraud. Key Terms The key terms used in the unit are listed below: Cash Receipts Journal: A cash receipts journal is used to record all cash receipt transactions. Schedule: Accountants prepare a schedule for each subsidiary ledger to determine whether the subsidiary ledger’s sum equals the controlling account’s ending balance. Internet Sales: Internet sales are a recent method of selling products with little expense and effort over the Internet. Despite the reduced cost of internet sales for the merchant (e.g., since a physical store is not required), special measures are required to ensure security and guard against fraud.
Special Journal: Purchases and Cash Payments: Introduction People make payments for transactions such as car insurance, or to pay installments for an item purchased on credit. Businesses also adopt similar modes of payment. Businesses buy most items on credit and keep a track of the due date for payment. In this section, you will learn how to handle purchases and cash payments journals, and the steps involved in recording the purchase of merchandise and other assets. The final part of this section defines the key terms used. Short questions, fill in the blanks, and multiple choice are given to test your reading and understanding. Special Journal: Purchases and Cash Payments - Key Concepts The key terms in this section are: Purchase Journal Cash Payment Journal Bankcard Fee Proving Cash Special Journal: Purchases and Cash Payments - Objectives After you have completed this section, you will be able to: 1. Explain the purpose of the Purchases and Cash Payments Journal. 2. Record transactions in the Purchases and Cash Payments Journal. 3. Record payroll transactions in the Cash Payments Journal. 4. Post transactions from the Purchases and Cash Payments Journal to the General Ledger and the Accounts Payable Subsidiary Ledger. 5. Explain how to total, prove, and rule the Purchases and Cash Payment Journals. 6. Prepare a schedule of Accounts Payable.
7. Explain how to prove cash. 8. Define the accounting terms introduced in this chapter. Purchase Journals A Purchase Journal contains details only of the Purchases On Account. Accountants use this journal as a special journal to record all Purchases On Account. Using the Purchases Journal The Purchases Journal is used to perform the following tasks: 1. Recording the purchase of merchandise on account 2. Journalizing the General Debit column (other purchases account) 3. Posting entries from the Purchases Journal 4. Posting from the General Debit column 5.
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- Accounting, invoice, CASH RECEIPTS JOURNAL, The sales journal, Accounts Receivable Subsidiary Ledger, sales credit column