We’re going to revisit our make-believe company, Lisa’s Candle Shop, and take the company’s books through a month-end closing. Our first stop is the cash receipts journal. This is the sub-ledger where a business tracks the details of its daily cash receipts, including cash, credit cards, and store credit. Only summaries of the day’s receipts are posted to the general ledger.

You may remember in Chapter 7 we had this summary of the day’s receipts for Lisa’s Candle Shop on February 15, 2010.

Although we know a business would not have the exact same number of sales at the exact same level each day, we’re going to take a shortcut and make believe Lisa’s Candle Shop does. To find her total sales for the month, we’re going to multiply these numbers by 28 for the days of February and assume the monthly totals represent actual month-end numbers. Also, to simplify this example, we’ll put Lisa, as the owner, in charge of closing the books. Most owners have an accountant or staff person who takes this responsibility.