9. Specialized cash book.—It has already been sug gested that sales of merchandise for cash might advis ably be handled by providing on the cash-debit page a special column for cash sales. The following is a form of cash-debit page which may often prove con venient in cases involving discounts for the prompt payment of cash, and the distribution of the accounts between the general and the subsidiary ledgers.
This form shows that on March 28, the proprietor gave his note—presumably interest-bearing, since there is no discount mentioned—and received $3,000 in cash; or else, that he had that sum placed to his credit at the bank. In the net-cash column there is an entry of $3,000, the actual amount of cash received. The notes-payable account is to be credited, but since there is no special column for notes payable, the amount of the credit is entered in the sundries column. From this column it will be posted directly to the notes-payable account in the general ledger, as was previously described in connection with the sales book.
In the next transaction, T. Peterson made a pay ment on account. He took advantage of the discount by paying his account within ten days, and conse quently remitted $231, less $4.30 discount. By pay ing $226.70 he discharges his entire indebtedness, pre viously recorded as $231. Since he has paid his account in full, he must be credited with the total amount; therefore this balance of $231 is entered in the accounts-receivable column. But, since the business received only $226.70 in actual cash, that amount is entered in the net-cash column as a debit to "cash." The amount of the discount allowed is entered in the discount on sales column as a charge to that ac count. It is apparent, therefore, that the discount on sales column represents a debit account, and that the total credit to the accounts-receivable column is offset by two debits, one to cash and one to discount. It should be noted that V. Olson did not pay his account in time to take advantage of the discount; his account is therefore credited only with the total of his cash payment.
The amount of cash sales, $220, is entered in the net-cash column as a debit to "cash," and in the cash sales column as a credit to "cash sales." It has been explained that the actual credit to "sales" goes thru the sales book, and that consequently there is no neces sity of repeating the credit thru the cash book. The charge is made to "cash" in this book, and it is offset by the entry in the sales book. Therefore, at the end
of the month the credit of the amount in the cash-sales column would not be posted.
10. Posting the debit page.—When the time comes to post the cash book debit page, each column is footed and the test is applied to ascertain whether the amount of debits and of credits are equal. The amounts in the accounts-receivable and sundries columns must be posted individually to the accounts named in the ac counts-credited column. The sundry items will be posted individually to the general-ledger accounts, and the accounts receivable will be posted to the subsidiary ledger in detail. The totals of each column, except the sundry column, will be posted to their respective accounts in the general ledger.
In the illustration, we will charge "cash" with $20, 389.70, and "discount on sales" with $453.90 and credit "customers' controlling account" with $14, 562.40. If each book were summarized in journal form, the entry would be completed by showing the total of the sundry column and the cash-sales column and by checking the amounts, to indicate that they had already been posted.
11. Cash-credit page.—The following form will il lustrate the credit page of a cash book with columns to provide for accounts that appear frequently.
On March 28, payment was made to cover a debt due the American Supply Company, as evi denced by invoice No. 60. This firm had previously been credited with the face of the invoice, to the amount of $1,000, thru the purchase book. The company offered a discount of 3 per cent for im mediate payment, and the entire indebtedness is can celed by the payment of $970 cash. The actual amount of cash paid is entered in the net-cash column as a credit to "cash," and the amount of discount de ducted is entered in the discount on purchases column as a credit to that account. The full amount of the American Supply Company's claim is entered in the accounts-payable column as a debit to the individual account, not only with that company but with the con trolling account for "creditor's accounts payable." On March 29, a freight bill incurred in connec tion with invoice No. 59 was paid. Since freight bills occur frequently, a "freight" column is provided, as in the sales book. It should be noted, however, that this kind of freight is totally different from that rep resented in the sales book. The amount of $50 is entered in the net-cash column as a credit to cash, and the freight is charged with the total of the freight column.