Chapter J, Problem 1P

(a)

To determine

Cash Receipts Journal

Cash receipts journal is used to record merchandise sales and service made in cash and collection of accounts receivable. It also records all other cash receipts from issuance of shares and bonds, bank loans, and proceeds from disposal of assets. To include all these transactions, companies use multi-column cash receipts journal.

Control account

It is a general ledger account which summarizes the entire details about the subsidiary ledger data. The purpose of using control account is that to maintain the general ledger free from many details and provide clean and correct balances to be used in the financial statements.

Subsidiary Ledger

Subsidiary ledger refers to the individual accounts, the summary of which is merged into the control account. It relives the burden on the general ledger and makes the posting easier and quicker. The most common subsidiary ledgers are:

1. 1. Accounts Receivable subsidiary ledger.
2. 2. Accounts Payable subsidiary ledger.

To journalize: the transactions in a cash receipt journal.

(b)

To determine

To prepare: the beginning balance and post transactions in the accounts receivable control and subsidiary account.

(c)

To determine

To Prove: the agreement of control account and subsidiary account balances.