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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

BOOKSHOP SANTA CRUZ, Santa Cruz, California

If you’re ever in Santa Cruz, California, take some time to visit Bookshop Santa Cruz. You’ll find books “that entertain, help solve problems, or occasionally, change a life.”

Since opening in 1966, Bookshop Santa Cruz has been a vital part of the Bay Area. The bookstore takes immense pride in being an independent bookseller, a rare commodity in today’s world of large corporate booksellers such as Barnes & Nobles.

The bookstore has several buyers who are responsible for spotting reading trends, reordering current books, and purchasing the newest and hottest books on the market.

Each time a buyer makes a purchase and every time Bookshop Santa Cruz makes a sale, a transaction must be recorded. Discuss the advantages a store such as Bookshop Santa Cruz would gain by recording the receipt of cash from sales in the cash receipts journal and the payment of cash for purchases in the cash payments journal.

To determine

List the advantages by recording the S Bookshop’s cash sales and cash purchases in the cash receipts and cash payments journal.

Explanation

Cash receipts journal: Cash receipts journal contains all transactions in which cash is received, or increased. When a cash receipts journal is used, all transactions in which cash is debited must be recorded in it. It may be used for a service as well as a merchandising business.

Cash payments journal is the special journal entry used to record all the transactions that cash goes out or decreases in the cash account. In the cash payment journal the transactions which are credit the cash must be recorded. This cash payment journal may be used for a service or merchandising business.

The advantages of using the cash receipts journal include:

1. Transactions are recorded one line.

2...

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