Part A: manual recording
1. Highway Heaven uses the perpetual method for recording inventory. The purchase price and selling price of all inventory items remains unaltered during the month.
2. Specialist journals are used to record transactions as follows:
Sales journal: credit sales of inventory
Purchases journal: credit purchases of inventory
Cash receipts journal: all cash receipts, including recepts from accounts receivable
Cash payments journal: all payments in cash including payments to account
i. Opening balances are recorded in the general journal and then posted to the general ledger.
ii. If a transaction is recorded in a specialist journal that transaction is not also recorded in the general journal.
iii. Purchases returns are not recorded in the specialist Purchases journal
iv. Sales returns are not recorded in the specialist Sales journal
3. Subsidiary ledgers are maintained for accounts receivable, accounts payable and inventory. At the end of the month the control account for accounts receivable, accounts payable and inventory must equal to totals form the appropriate subsidiary ledger. Note: this is a common error in assignments.
4. Pro-forma journals, ledgers, worksheets and reports (excel file) are available in the assessment folder and must be used to submit part A. This file must be submitted into the assignment submission box.
1. Transactions are recorded in the various modules as follows:
Sales module: all sales transactions which include cash sales and credit sales, sales returns and receipts from customers. Hint: Establish a customer named ‘cash sales’.
Purchases module: all purchase transactions which are cash and credit purchases, purchases returns and payments to accounts payable. Hint: Establish an accounts payable named ‘cash purchases’
Bank: all other (i.e. excluding any of the above) transactions involving cash e.g. interest income, and payment of operating (rent etc.) and other cash disbursements.
Inventory: opening balances and inventory adjustments resulting from a stock-take are the only transactions recorded in this module. The inventory on hand for each inventory item is updated via the Sales and Purchases module each time an inventory item is purchased, sold or returned.
Hint: Establish lessons as an inventory item.
The Balance Sheet from the manual recording should be the same as the Balance Sheet from MYOB recording.
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