Lesson Plan 7.3 Analyze and Journalizing Sales and Cash Receipts Course Title Accounting I Session Title Analyze and Journalize Sales and Cash Receipts Lesson Purpose Demonstrate skill in analyzing and journalizing transactions related to sales and cash receipts. Behavioral Objectives Identify terms related to sales discounts, sales returns and allowances and correcting entries. Analyze and journalize sales discounts. Analyze and journalize sales returns and allowances. Analyze and journalize correcting entries. Preparation OLD TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 120.42.C 7.a. follow oral and written instructions; 7.b. develop time management skills by setting priorities for completing work as scheduled. 7.c. make decisions using appropriate accounting concepts; 7.e. perform accounting procedures using manual and automated methods; 7.g. demonstrate use of the numeric keypad by touch 2010 TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.166.C 7.e. process sales orders, invoices, returns, and allowances TAKS Correlation: WRITING Objective 5: The student will produce a piece of writing that demonstrates a command of the conventions of spelling, capitalization, punctuation, grammar, usage, and sentence structure. Lesson Plan 7.3 Analyzing and Journalizing Sales and Cash Receipts
Objective 6: The student will demonstrate the ability to revise and proofread to improve the clarity and effectiveness of a piece of writing. MATH Objective 10: The student will demonstrate an understanding of the mathematical processes and tools used in problem solving. Materials, Equipment and Resources: Textbook Accounting Software Journal Input Forms Spreadsheet Software Teaching Strategies: Observation Demonstration Verbal Drills Lesson Content: Instruction and demonstration of terms related to sales and cash receipts, and analyzing and journalizing transactions in sales discounts, sales returns and allowances, and correcting entries. Assessment: Observation Graded Assignments Lesson Plan 7.3 Analyzing and Journalizing Sales and Cash Receipts
Additional Resources: Textbooks: Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting Real- World Applications and Connections. Glencoe McGraw-Hill 2000. ISBN/ISSN 0-02-815004-X. Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting Multicolumn Journal Anniversary Edition, 1st Year Course. South- Western Educational and Professional Publishing, 2003. ISBN/ISSN: 0-538-43524-0 Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General Journal Accounting Anniversary Edition, 7th Edition. South- Western Educational and Professional Publishing, 2003. ISBN/ISSN: 0-538-43529-1. Websites: U. S. Chamber of Commerce: Small Business Solutions. Chamber of Commerce, 2003. http://www.uschamber.com/sb/p06/p06_1414.asp. Business Partners: Local merchants Lesson Plan 7.3 Analyzing and Journalizing Sales and Cash Receipts
Activity 7.3.1 Identifying Terms Course Title Accounting I Session Title Analyzing and Journalizing Sales and Cash Receipts Activity Purpose Demonstrate knowledge in terms relating to sales and cash receipt transactions. OLD TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 120.42.C 7.a. follow oral and written instructions; 7.b. develop time management skills by setting priorities for completing work as scheduled; 2010 TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.166.C N/A TAKS Correlation: N/A Materials, Equipment and Resources: Textbook Index cards Scissors Tape Color Card Stock Markers Teaching Strategies: Observation Verbal Drill Activity 7.3.1 Identifying Terms
Activity Outline: 1. Have your students work in teams of three or four to create a game to play. Use the following terms in the game. The game should include all pieces as well as an instruction sheet. contra account sales allowance contract of sale draft sight draft time draft letter of credit bill of lading commercial invoice sales discount sales returns credit memorandum sales slip credit terms controlling account trade acceptance wholesaler retailer discount period correcting entry 2. Ask the teams to trade their games with another team to learn the terms. Activity 7.3.1 Identifying Terms
Assessment: Observation Graded Assignment: Quality Feature Team s game well thought out The game includes all pieces so it can be played Game instructions clear and concise All team members participate in the assignment Team participates in the game they were traded Team demonstrates knowledge of the terms in a verbal drill Completes game preparation and playing in a timely manner Score Activity 7.3.1 Identifying Terms
QUIZ ON TERMS 1. A form prepared by the vendor showing the amount deducted for sales returns and allowances. a. debit memorandum b. credit memorandum c. purchase invoice d. sales invoice 2. Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor s accounts receivable. a. sales return b. sales allowance c. purchases return d. purchases allowance 3. A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party. a. check b. dated order c. draft d. receipt 4. A draft payable at a fixed or determinable future time after it is accepted. a. fixed draft b. sight draft c. future draft d. time draft 5. An account with a balance that is a decrease to another account. a. liability account b. contra account c. controlling account d. decrease account 6. The period of time within which an invoice must be paid if a discount is to be taken. a. time account b. credit terms c. terms of payment d. discount period 7. An entry made to correct an error in a journal entry discovered after posting. a. adjusting entry b. closing entry c. correcting entry d. time entry 8. A form that lists the details of a sale. a. packing slip b. sales slip c. invoice d. register tape 9. A business that sells to retailers. a. wholesaler b. primary seller c. secondary seller d. subsidiary seller Activity 7.3.1 Quiz on Terms
QUIZ ON TERMS - KEY 1. A form prepared by the vendor showing the amount deducted for sales returns and allowances. d. debit memorandum *b. credit memorandum c. purchase invoice e. sales invoice 2. Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor s accounts receivable. e. sales return *b. sales allowance c. purchases return d. purchases allowance 3. A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party. f. check g. dated order *c. draft d. receipt 4. A draft payable at a fixed or determinable future time after it is accepted. h. fixed draft i. sight draft j. future draft *d. time draft 5. An account with a balance that is a decrease to another account. k. liability account *b. contra account e. controlling account f. decrease account 6. The period of time within which an invoice must be paid if a discount is to be taken. l. time account m. credit terms n. terms of payment *d. discount period 7. An entry made to correct an error in a journal entry discovered after posting. a. adjusting entry b. closing entry *c. correcting entry d. time entry 8. A form that lists the details of a sale. a. packing slip *b. sales slip c. invoice d. register tape 9. A business that sells to retailers. *a. wholesaler b. primary seller c. secondary seller d. subsidiary seller Activity 7.3.1 Quiz on Terms
Lesson 7.3 Activity Analyzing and Journalizing Sales Discounts - 7.3.2 Course Title Accounting I Session Title Analyzing and Journalizing Sales and Cash Receipts Activity Purpose Demonstrate knowledge in terms relating to sales and cash receipt transactions. Old TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 120.42.C 7.a. follow oral and written instructions; 7.b. develop time management skills by setting priorities for completing work as scheduled; 7.c. make decisions using appropriate accounting concepts; 7.e. perform accounting procedures using manual and automated methods; 7.g. demonstrate use of the numeric keypad by touch 2010 TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.166.C N/A TAKS Correlation: MATH Objective 10: The student will demonstrate an understanding of the mathematical processes and tools used in problem solving. Materials, Equipment and Resources: Textbook Spreadsheet Software Teaching Strategies: Observation Verbal Drills Activity 7.3.2 Analyzing and Journaling Sales Discounts reserved. Copyright Texas Education Agency, 2011. All rights
Activity Outline: 1. Have your students work in a team to determine which of these statements are false. Have them rewrite each false statement to make it a true statement. Sales discounts are given to encourage early payment for a sale on account. A cash discount on sales is not called a sales discount. The invoice is the same as it was previously when a sales discount is taken. The amount of a sales discount is deducted from sales. Sales Discount is a contra account. The normal balance side of Sales Discount is a debit. Accounting practices allow for the amount of a Sales Discount to be recorded as a debit to Sales. Selling merchandise on account allows the customer to increase its volume of sales due to convenience. 2. Demonstrate Sales, Sales Discount, Sales Tax Payable, Accounts Receivable and Cash in T accounts. 3. Using the T accounts demonstrate the analysis of these transactions: Received cash on account from ABC, Inc. $535.84, covering Sales Invoice 4 for $541.25 ($500.00 Sale plus Sales Tax $41.25), less 1% discount $5.00 and.41 Sales Tax. Receipt No. 1 Received cash on account from Joyles, Inc. $2,175.18, covering Sales Invoice 5 for $2,208.30 ($2,040.00 plus Sales Tax $168.30), less 1.5% discount $30.60 and 2.52 Sales Tax. Receipt No. 2 Received cash on account from JR, Inc. $466.77, covering Sales Invoice 6 for $476.30 ($440.00 Sale plus Sales Tax $36.30), less 2% discount $8.80 and.73 Sales Tax. Receipt No. 3 4. Demonstrate calculations of sales discounts and sales tax by making and using a Calculating Sales Discounts spreadsheet. 5. Journalize the transactions for both the sales on account and the receiving of cash in the spreadsheet using a computerized accounting system. Use the business number in the first column for the business name and for the source document, use S1-S6 and R1-R6. Activity 7.3.2 Analyzing and Journaling Sales Discounts reserved. Copyright Texas Education Agency, 2011. All rights
Assessment: Observation Graded Assignment Quality Feature Spreadsheet entries accurate Journal entries accurate Completes in a timely manner Score Activity 7.3.2 Analyzing and Journaling Sales Discounts reserved. Copyright Texas Education Agency, 2011. All rights
Lesson 7.3 Activity Analyzing and Journalizing Sales Returns and Allowances - 7.3.3 Course Title Accounting I Session Title Analyzing and Journalizing Sales Returns and Allowances Activity Purpose Analyze and journalize Sales Returns and Allowances transactions. OLD TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 120.42.C 7.a. follow oral and written instructions; 7.b. develop time management skills by setting priorities for completing work as scheduled; 7.c. make decisions using appropriate accounting concepts; 7.e. perform accounting procedures using manual and automated methods; 7.g. demonstrate use of the numeric keypad by touch 2010 TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.166.C N/A TAKS Correlation: MATH Objective 10: The student will demonstrate an understanding of the mathematical processes and tools used in problem solving. Materials, Equipment and Resources: Textbook Spreadsheet Software Teaching Strategies: Observation Verbal Drills Activity 7.3.3. Analyzing and Journaling Sales Returns and Allowances Copyright Texas Education Agency, 2011. All rights reserved.
Activity Outline: 1. Discuss why a business might need to return merchandise or ask for an allowance on merchandise. Emphasize the difference. 2. Demonstrate the accounts Sales and Sales Return and Allowances using T accounts. Explain the normal balance side and the increase and decrease side. 3. Demonstrate a transaction for a sale on account using a T account. Accounts Rec. DR Sales CR Sales Tax Payable CR $5,412.50 $5,00 0.00 $412.50 4. Demonstrate a transaction for sales returns and allowances. Sales Ret. and Allow. DR Sales Tax Payable DR Accounts Receivable CR $500.00 $41.25 $541.25 5. Analyze and journalize these transactions: Granted credit to Sims, Inc. for merchandise returned, $52.00, plus sales tax $4.13; total $56.13, Credit Memorandum No. 1 Granted credit to Sams, Inc. for merchandise returned, $210,00, plus sales tax $17.33; total $227.33, Credit Memorandum No. 2 Granted credit to Sula, Inc. for merchandise returned, $17.00, plus sales tax $1.40; total $18.40, Credit Memorandum No. 3 Granted credit to Smith s, Inc. for merchandise returned, $23.00, plus sales tax $1.90; total $24.90, Credit Memorandum No. 4 Granted credit to SAN, Inc. for merchandise returned, $2,000, plus sales tax $165.00; total $2,165.00, Credit Memorandum No. 5 Activity 7.3.3. Analyzing and Journaling Sales Returns and Allowances Copyright Texas Education Agency, 2011. All rights reserved.
Assessment: Observation Graded Assignment Quality Feature Journal entries accurate Input form accurate Completes in a timely manner Score Activity 7.3.3. Analyzing and Journaling Sales Returns and Allowances Copyright Texas Education Agency, 2011. All rights reserved.
Lesson 7.3 Activity Analyzing and Journalizing Correcting Entries - 7.3.4 Course Title Accounting I Session Title Analyzing and Journalizing Sales Returns and Allowances Activity Purpose Analyze and journalize correcting entries affecting customer accounts. OLD TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 120.42.C. 7.a. follow oral and written instructions; 7.b. develop time management skills by setting priorities for completing work as scheduled; 7.c. make decisions using appropriate accounting concepts; 7.e. perform accounting procedures using manual and automated methods; 2010 TEKS Correlations: This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed. 130.166.C N/A TAKS Correlation: N/A Materials, Equipment and Resources: Textbook Teaching Strategies: Observation Verbal Drills Activity 7.3.4 Analyzing and Journaling Correcting Entries ACCOUNTING I
Activity Outline: 1. Discuss the difference in errors that only affect subsidiary ledgers and do not affect the general ledger. 2. Have your students analyze these transactions and journalize them in a journal input form. Assessment: Discovered that a sale on account to Johnston, Inc. was incorrectly charged to Johnson, Inc., $415.00, Memorandum No. 1 Discovered that a sale on account to REB, Inc. was incorrectly charged to RER, Inc., $2,100.00, Memorandum No. 2 Discovered that a sale on account to Laney, Inc. was incorrectly charged to Lany, Inc., $27.00, Memorandum No. 3. Observation Graded Assignment Quality Feature Transactions analyzed accurately Accurately enters transactions in a journal input form Completes in a timely manner Score Activity 7.3.4 Analyzing and Journaling Correcting Entries ACCOUNTING I