 In this presentation we will take a look at multiple choice questions related to special journals. First question, which of the following journals are used to record adjusting entries? A. General Journal. B. Cash Receipts Journal. C. Cash Disbursements Journal. D. Purchases Journal. Or E. Sales Journal. One more time we'll read through these and see if we can cross them out with the process of elimination. Which of the following journals are used to record adjusting entries? Before we do so let's just take a quick look and say okay what are adjusting entries? Notice those adjusting entries are the ones that happen after we have done the normal journal entries throughout the process. If we are using special journals as we are here then you can imagine that we're doing the day-to-day transactions entering the information into these special journals and then recording those to the general journal at the end of the time period and then posting them to the general ledger and creating the financial statements from this information. So if we go through here and then after that then we would take the the trial bounce the unadjusted trial bounce and put those adjusting entries in those adjusting entries being the things that are going to be making our financial statements more on an accrual basis and we would be using the adjusting entries in a similar fashion whether we be using a system that just has journal entries or a system that has special journals. So A says the general journal. Now the general journal is like that default journal that we use when we can't fit something into any other type of journal. So I'm going to keep that there for now because the adjusting entries isn't a normal type of journal entry process it's at the end of the time period. So we'll keep that there for now. B says cash receipts journal. Now the adjusting entries again they're not something that happened during the time period and the cash receipts journal is usually what we do when we do the normal data input throughout the time period and it has cash in it and the adjusting entries typically don't have cash involved because cash isn't something that we typically have to do a timing adjustment for at the end. So I'm going to say that's not it. C says cash disbursements journal. Same reasoning there the cash disbursements journals used as we go through the process and cash isn't even involved typically in most of the adjusting entries that we we think of so I'm going to say it's not that one. Purchases journal. Purchases journal is what we do throughout the time process it's fairly specific it means that we're going to be crediting accounts payable and debiting some other account possibly inventory or supplies or something like that for most of the purchases but the adjusting entry doesn't necessarily fall into that we might adjust an accounts payable account in the adjusting process but it doesn't seem that's going to be the case because because once again that's during the normal journal entry process the purchase journal is used for and we are in the in the adjusting process the sales journal also a very specific journal debuting accounts receivable and crediting sales but that's the normal journal entry not really the adjusting journal entry we're going to need so we might have you know one journal entry that could fit into that kind of format in the adjusting process but we're probably not going to use the sales journal because that's used during the the month not at the adjusting entry process at the end of it so I think we're left with just the general journal the default journal the journal we use when you know the the transactions don't fit into any other account and that's the nature of the adjusting entries even if we're not using special journals that the problem with them are that we set up the system so that we need these kind of funny adjustments at the end adjustments that aren't normal things that we do throughout the process and therefore don't have a normal kind of special journal that we can set up for them so we're going to say the general journal once again the question and answer which of the following journals are used to record adjusting entries a general journal next question pays payroll with cash what journal is used so pays I think it should be pay payroll with cash so we're going to pay payroll with cash what journal are we using a cash disbursements journal b sales journal c cash receipts journal d purchases journal or e general journal again we'll read through this see if we can cross some of these out with the process of elimination pays payroll with cash what journal is used a cash disbursements journal now that's going to be a special journal that we will have when we disperse or pay cash and so that looks reasonable it looks like we are paying cash for payroll so I'm going to I'm going to keep that one for now b says sales journal that's a specific journal relating to making sales on account so that'd be a no cash involved in this journal and it's a sales transaction therefore it doesn't look like it's going to be there for payroll c says cash receipts journal now the cash receipts journal would be used when we get the cash not when the employee gets the cash we are paying cash here so it shouldn't be in the cash receipts journal because the cash is going out and then d says the purchases journal a purchases journal we're kind of purchasing something we're purchasing labor in a way but really purchases journal is usually when we purchase something like inventory and it deals with accounts payables really the accounts payable journal so it's not going to be the purchases journal and then the general journal is kind of like the default if we can't find another location for it we use the general journal so I'll keep that for now I'm going to leave it with a and e cash disbursement journal and general journal and read through it one more time cash payroll with pays payroll with cash what journal is used a cash disbursements journal or e the general journal now I think of the two the I think it can fit into the cash disbursements journal we're going to run payroll and we can say that if we're paying it with cash then cash anytime cash goes out we can use basically the cash disbursement journal to cover that so the general journal would be there if no other journal was appropriate it may not be the first type of transaction we would think of for the cash payment journal but I think it would work so I'm going to go with a and the answer then is pays payroll with cash what journal is used a cash disbursements journal next question which of the following journals would a company used to record a merchandise return a general journal b cash receipts journal c cash disbursements journal d purchases journal e sales journal okay we're going to read through this one more time try to think through it a bit and then we'll and then we'll look at our answers again so which of the following journals would a company use to record a merchandise return now this is this is going to be one of a little bit more confusing one because we have to first kind of it's not a normal transaction so we might first want to think about what what was the merchandise purchase type of activity and then the return of another thing that's not entirely clear here is whether we are returning the merchandise or the customers returning the merchandise to us so let's first let's think of both those scenarios and in the case and if we say if we if we say well okay we're returning merchandise well if we bought the merchandise on account it would have been a counselor see like it would have been inventory is debited and then we would have had the credit go to accounts payable and if we returned it then accounts payable should be going down with a debit and inventory should be going down with a credit because we gave it back away now if someone on the other hand if we were returning merchandise to us that we sold when we sold the merchandise we would have had a debit to accounts receivable for the IOU and a credit to the sales and then if they return it we'd also have cost a good sold an inventory but I won't think about that now I think we're actually dealing with this transaction up here but in any case if they returned it then we would reverse this and say that it would be sales return and allowance would be debit and we credit AR so in any of these cases would do any of these fit into these journals the first one says the general journal now if we can't find a place for these we're going to go to the general journal I'm basically looking at this transaction mainly I think that's the one they're asking about or possibly this transaction depending on if we're the seller or the purchaser then B says purchase receipts journal now the purchase receipts journal um or the cash receipts journal means that we there's cash affected we got cash and you can see there's no cash involved here because we're assuming we made the sale on account so it can't be that and that's what the and again that's an assumption we're making but that's typically then see cash disbursements journal again cash is involved and there's no cash involved here so that doesn't look like it purchases journal that's what we purchased the the inventory and that would be up here when we purchased it but now we're returning it and so it's not going to fit in the purchase journals anymore so it's got the same accounts but they go in the wrong way because the purchase journal would be would be a debit to inventory and a credit to accounts payable we can't use the same journal it go in the other way so and then the sales journal that would be this one here when we make the sale but again if they were talking about someone returning inventory to us it wouldn't fit in that journal because again it would be going the wrong way so it can't be there so whether we're talking about us being the purchaser or the seller it that the return doesn't fit into any normal journal so we would have to put in the default journal that being the general journal so once again which of the following journals would a company use to record a merchandise return a general journal