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HFT 2401

HFT 2401. Chapter 7 Specialized Journals and Subsidiary Ledgers. Specialized Journals. Leads to greater efficiency in a manual system Allows for reduced postings to the general ledger Daily transactions are recorded in the subsidiary ledger and updated periodically Cash Journal

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HFT 2401

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  1. HFT 2401 Chapter 7 Specialized Journals and Subsidiary Ledgers

  2. Specialized Journals • Leads to greater efficiency in a manual system • Allows for reduced postings to the general ledger • Daily transactions are recorded in the subsidiary ledger and updated periodically • Cash Journal • Payroll Journal

  3. General Ledger and Control Accounts • Control accounts are used for general ledger accounts that have numerous entries. They supply the detail for each account • Accounts Receivable • Accounts Payable • Prepaid Insurance • Prepaid Expenses

  4. Control Accounts • Balances of the control accounts must equal the balance recorded on the general ledger • Accounts Receivable Subsidiary Ledger – balances due from each guest or city ledger (direct bill) account must total & equal the general ledger • Accounts Payable Subsidiary Ledger– amounts due to each supplier must total and equal the amount recorded on the general ledger

  5. Lodging Industry Accounts Receivable - Trade • Guest Ledger – Guests currently in house or house accounts to be settled on a current basis • City Ledger – Departed guests. Have credit terms established. Can be guest or non-guest related.

  6. Specialized Journals • Advantages • Increased efficiency – one line used in the journal • Time saved in posting to general ledger accounts – only column totals are posted to the general ledger, not individual detail

  7. Specialized Journals • Advantages • Improvements to internal controls • Separation of duties in recording transactions • Reduction of errors in general ledger postings as the number of transactions are reduced

  8. Types of Journals Used • Sales journal – S, SJ, or IJ • Cash receipts journal – CR or CJ • Purchases journal – P or PUR • Cash disbursements journal - CD • General journal - GJ

  9. Requirements for Posting • Supporting evidence / Documentation • Posting references column • Amount

  10. Sales Journal • Used for posting all transactions on accounts • May be either cash or charge transactions • Also posted to customers individual subsidiary ledger simultaneously

  11. Cash Receipts Journal • Used to record cash inflows only • Headers to journal would include offset accounts to post credit to: • Accounts Receivable • Sales • Other

  12. Purchases Journal • Used to record all purchases on account • Headers can include different accounts for the type of purchase i.e. – food purchases, beverage purchases, supply purchases

  13. Cash Disbursements Journal • Records all transactions involving the payment of cash • Accounts payable • Petty cash • Payroll • Immediate disbursements

  14. Payroll Journal • Records Payroll Expenses • Salary expense • Deductions • FWT – Income Taxes • FICA / Medicare • State & Local Taxes • Insurance • Other

  15. General Journal • A “catch-all” journal • Used to record transactions that do not fit into a specialized journal

  16. Specialized Journals for Lodging • Front office cash receipts and disbursements journal • Allowance journal • Transfer journal

  17. Homework • Problem 5 • Problem 7 • Problem 9

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