Page 195 - Accounting Information Systems

166 PART II Transaction Cycles and Business Processes

FI G U RE
4-11 CASH RECEIPTS JOURNAL

Cash Receipts Journal

Date Account Post Check Cash Sales Discounts Accounts Sales Sundry
Ref # Acct. # 101 Acct. # 430 Receivable Acct. # 401 Accounts
(Debit) (Debit) Acct. # 102 Credit Debit (Credit)
9/3 Capital Stock 301 2150 14,000 14,000
9/5 Ogment Supply 6712 2,970 30 3,000
9/9 Marvin Co. 3491 1,000 1,000

this function are thus identified. After reconciling the prelist to the checks, the employee records the
check in the cash receipts journal. All cash receipts transactions, including cash sales, miscellaneous
cash receipts, and cash received on account, are recorded in the cash receipts journal. Figure 4-11 illus-
trates this with an example of each type of transaction. Notice that each check received from a customer
is listed as a separate line item.
Next, the clerk prepares a bank deposit slip showing the amount of the day’s receipts and forwards this
along with the checks to the bank. Upon deposit of the funds, the bank teller validates the deposit slip
and returns it to the company for reconciliation. At the end of the day, the cash receipts employee summa-
rizes the journal entries and sends the following journal voucher entry to the general ledger function.
DR CR
Cash XXXX.XX
Accounts Receivable Control XXXX.XX
UPDATE ACCOUNTS RECEIVABLE. The remittance advices are used to post to the customers’
accounts in the AR subsidiary ledger. Periodically, the changes in account balances are summarized and
forwarded to the general ledger function.

UPDATE GENERAL LEDGER. Upon receipt of the journal voucher and the account summary, the
general ledger function reconciles the figures, posts to the cash and AR control accounts, and files the
journal voucher.

RECONCILE CASH RECEIPTS AND DEPOSITS. Periodically (weekly or monthly), a clerk from
the controller’s office (or an employee not involved with the cash receipts procedures) reconciles cash
receipts by comparing the following documents: (1) a copy of the prelist, (2) deposit slips received from
the bank, and (3) related journal vouchers.

REVENUE CYCLE CONTROLS
Chapter 3 defined six classes of internal control activities that guide us in designing and evaluating trans-
action processing controls. They are transaction authorization, segregation of duties, supervision,
accounting records, access control, and independent verification. Table 4-1 summarizes these control
activities as they apply in the revenue cycle.