Journals (Cambridge International IGCSE Accounting)

Sales journal

What is the sales journal?

• The sales journal is a record of all credit sales

  • Cash sales are not recorded in the sales journal

    • They are recorded directly into the cash book

• It contains:

  • The dates of sales

  • The names of the credit customers

  • The amounts for each of the sales

    • The amounts should be after trade discounts have been applied to the list prices

• The book-keeper uses the sales invoices that were issued to enter the information into the sales journal

How are totals transferred to the ledger accounts?

• The totals are transferred to the ledger accounts at regular intervals

  • Credit the sales account with the total

    • Call this entry “Sales journal”

  • Debit the individual trade receivables accounts

Exam Hint If a sales journal is used, only one entry is made to the sales account at the end of a given period rather than separate entries for each individual sale.

If a question does not mention a sales journal, enter the individual transactions into the sales account and label them with the names of the trade receivables.

Sales returns journal

What is the sales returns journal?

• The sales returns journal is a record of all the returns from credit customers

• It contains:

  • The dates of the returns
  • The names of the credit customers
  • The amounts for each of the returns

• The book-keeper uses the credit notes that were issued to enter the information into the sales returns journal

How are totals transferred to the ledger accounts?

• The totals are transferred to the ledger accounts at regular intervals

  • Debit the sales returns account with the total

    • Call this entry “Sales returns journal”

  • Credit the individual trade receivables accounts

Exam Hint If a sales returns journal is used, only one entry is made to the sales returns account at the end of a given period rather than separate entries for each individual return.

Purchases journal

What is the purchases journal?

• The purchases journal is a record of all credit purchases

  • Cash purchases are not recorded in the purchases journal

    • They are recorded directly into the cash book

  • Purchases of non-current assets are not recorded in the purchases journal

    • They are recorded directly into the cash book

• It contains:

  • The dates of the purchases
  • The names of the credit suppliers
  • The amounts for each of the purchases

• The book-keeper uses the purchases invoices that were received to enter the information into the purchases journal

How are totals transferred to the ledger accounts?

• The totals are transferred to the ledger accounts at regular intervals

  • Debit the purchases account with the total

    • Call this entry “Purchases journal”

  • Credit the individual trade payables accounts

Exam Hint If a purchases journal is used, only one entry is made to the purchases account at the end of a given period rather than separate entries for each individual purchase.

If a question does not mention a purchases journal, enter the individual transactions into the purchases account and label them with the names of the trade payables.

Purchases returns journal

What is the purchases returns journal?

• The purchases returns journal is a record of all the returns to credit suppliers

• It contains:

  • The dates of the returns
  • The names of the credit suppliers
  • The amounts for each of the returns

• The book-keeper uses the credit notes that were received to enter the information into the purchases returns journal

How are totals transferred to the ledger accounts?

• The totals are transferred to the ledger accounts at regular intervals

  • Credit the purchases returns account with the total

    • Call this entry “Purchases returns journal”

  • Debit the individual trade payables accounts

Exam Hint If a purchases returns journal is used, only one entry is made to the purchases returns account at the end of a given period rather than separate entries for each individual return.

Worked Example Jeff is a sole trader. In February 2024, the following transactions took place.

Feb 1	Bought goods on credit from Samson, $500
3	Bought goods on credit from Helina with a 10% trade discount, list price $300
6	Returned goods to Samson, $50
7	Paid $250 to Samson by credit transfer
10	Bought goods using cash from Jimmy, $70
15	Bought goods on credit from Samson, $400
18	Sold goods on credit to Jasper, $180
28	Returned goods to Samson, $100

Prepare the purchases journal and the purchases returns journal for February 2024. Total the journals on 29 February 2024, and indicate the ledger account to which the total would be posted.

Answer:

Feb 1	Purchases journal: $500 Samson
3	Find the discount given by Helina 10% × $300 = $30 Find the amount Jeff owes Helina $300 - $30 = $270 Purchases journal: $270 Helina
6	Purchases returns journal: $50 Samson
7	Neither journal: it is a payment, not a purchase or return This would go in the cash book
10	Neither journal: it is a cash purchase This would go in the cash book
15	Purchases journal: $400 Samson
18	Neither journal: it is a credit sale This would go in the sales journal
28	Purchases returns journal: $100 Samson

Final answer: Purchases Journal

Final answer: Date	Final answer: Details	Final answer: $
Final answer: Feb 1	Final answer: Samson	Final answer: 500
Final answer: Feb 3	Final answer: Helina	Final answer: 270
Final answer: Feb 15	Final answer: Samson	Final answer: 400
Final answer: Feb 29	Final answer: Transfer to purchases account	Final answer: 1 170

Final answer: Purchases Returns Journal

Final answer: Date	Final answer: Details	Final answer: $
Final answer: Feb 6	Final answer: Samson	Final answer: 50
Final answer: Feb 28	Final answer: Samson	Final answer: 100
Final answer: Feb 29	Final answer: Transfer to purchases returns account	Final answer: 150