 In this presentation, we're going to take a look at multiple choice questions related to special journals. First question. Company purchased merchandise on account. Then company returned part of the merchandise due to damage. When company pays for the merchandise minus the return, it would record payment in the B, A general journal, B cash receipts journal, C cash disbursements journal, D purchases journal, and E the accounts payable controlling account. Okay, let's see if we can read through this one more time and then cross them out in terms for a process of elimination, see if we can break this down a bit as we read through it and see what is happening here. So company purchases merchandise on account. So that would be usually typically going to the purchases journal and the transaction being a debit to something purchases inventory looks like and a credit to accounts payable. So that's the first thing that happened went into the purchases journal. Then the company returned part of the merchandise due to damage. Normally the journal entry for that would be that we'd have to debit accounts payable and because we no longer owe it because we returned it, we don't owe it anymore so we're reducing accounts payable and then credit inventory to make inventory go down. So then we're going to have when the company pays the merchandise minus the return, meaning we're paying this original transaction minus what we gave back. So if we if we deputed 100 here, if we and this is what I would do just to if I was confused on this and it was making trying to figure this out. And then when we return some stuff, let's say we only returned $10 of merchandise that was damaged. Well we still owe $90 then so we owe $90. So the journal entry would typically be that we would we would have to then credit cash for the 90 that we still owe and reduce accounts payable for the 90. So this is the trend out of all that I think this is the transaction that we're trying to look to find where to put that in terms of our journals. So when company pays the merchandise minus the return, we record the payment in the a the general journal. And that's usually our default journal. So if we can't find any other journal to post it to then we'll put it into the general journal be cash receipts journal. We're not going to get cash here we're going to pay cash. So I don't think it's going to be a cash receipts journal. C says cash disbursements journal and we are going to be paying cash. So that seems reasonable I'm going to I'm going to keep that for now D says purchases journal. Now we made a purchase but we purchased it the purchase journal portion would be when we first made the purchase on account not when we're paying for it at this point. So I don't think that's it he says accounts payable controlling account. I don't think so that's that's going to be the general ledger account typically the controlling account. So I think we're left with the general journal and the cash disbursements journal. Now again the general journal is usually used when we can't find another journal. So if it fits in the cash disbursement journal, which I think it does, then we would have to use that and we can eliminate the general journal because that would be the default option. So I think we're left with C here. So if we read through this one more time and give the answer it would be company purchased merchandise on account then company returned part of the merchandise to damage when company pays for the merchandise minus the return it would record the payment in the C cash disbursements journal. Next question which of the following journals would a company use to record cash collections from a customer net of discounts taken we're going to say a the general journal once again that's our default journal. So I'll keep that for now be cash receipts journal C cash disbursements journal D purchases journal or E sales journal. So let's go through this one more time and then we'll cross them out. So here we go which of the following journals would a company use to record cash collections from customers net of discount. So cash collections. So if that happens the journal would be that cash we know cash is being affected we would debit cash let's say we got like $100 in cash let's say we got 90 in cash and then we're going to say that we had a discount some type of discount. So I'm going to say there's a sales discount discount and that would be the 90. And then the other side would be accounts receivable would be like the hundred so they owed us 100 but then we gave them a discount of $10 and so they gave us 90 is what we actually got so we're looking so like where would a transaction like this go that'd be the journal entry that we're trying to fit into a special journal here. So which of the following journals would a company use to record the cash collections cash from the customer net of discount taken a the general journal and that would be like the default. So if it can't find anywhere to put this that's where it would go. So I'll keep it there for now be cash receipts journal. Now we did get cash because we would be getting cash. We had a discounted accounts payable too but that seems like it could be the place. C says cash disbursements journal. Now we didn't disperse any cash we received cash so I don't think that's it. E says purchases journal. We're not purchasing stuff we're getting paid for stuff we sold someone purchased from us and then E says sales journal and this is this is a sale but the sale happened prior to this and we're kind of collecting on the sale that happened probably in the sales journal prior to this. So it's not that I think it's going to be a or B a the general journal the default if we can't find anywhere else to put it B cash receipts journal which is a better place to put it so therefore I don't think we need to put it in the general journal because we can put it in the cash receipts journal I believe the answer then would be B rated through one more time which of the following journals would a company use to record cash collections from customers net of discounts taken B cash receipts journal. Next question accounts receivable subsidiary ledger A can replace the sales journal B shows data for individual customers C stores data for vendors D can replace the cash receipts journal or E is also the controlling account. Let's read through it one more time see if we can eliminate some of the items for the process of elimination through the process of elimination accounts receivable subsidiary ledger so let's describe that first before we try to read through these the subsidiary ledger is going to be giving us more information than the controlling account than the general ledger. So the general ledger typically listing out information for accounts receivable by date of transaction subsidiary ledger on the other hand listing information by who owes us money so in other words by customer. So let's read through these A can replace the sales journal the accounts receivable subsidiary ledger it doesn't they're connected the sales journal is going to be where we record the transactions and then record post them to the subsidiary ledger and to the general ledger so it's going to be in addition to the general ledger and not replacing the sales journal so I'm going to cross that out B shows data for individual customers and that's that's kind of true that's basically what it breaks out the information by customer I'll keep that for now C stores data for vendors now that would be a subsidiary ledger but not the receivable one that would be for the payable one so that's not going to be this one D can replace can replace for cash receipts journal can replace the cash receipts journal and and no it doesn't it's not going to replace the cash receipts journal because we were still going to have to record the journals the special journals being separate from the subsidiary ledgers so no I'm going to cross that out E is also the controlling account now that you might think that would be it's I'm going to keep B and E read it one more time counts receivable subsidiary ledger B shows data for individual customers or E is also the controlling account now when you hear controlling account that's typically the GL account the general ledger and that's going to list things out by date not by individual customer that's not the order it'll be in so it's not really E it's going to be I guess it's going to have to be B it shows the individual customers now it lists the same information as the general ledger but instead of by date it will be by ordered by customer so one more time accounts receivable subsidiary ledger B shows data for individual customers