Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal.
Frequent expenses have their own headings across the sheet. He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage.
Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. If he did, he would record them in the journal, even though he could not deduct them as business expenses.
Henry carries the January total of expenses for materials ($1,083.50) to the Annual Summary. Similarly, he enters monthly total of expenses for telephone, truck, and auto in the appropriate columns of that summary.
Year 20-- Month January
| Day | Paid To | Check # | Amount of Check | Materials | Gross Payroll | Federal Withheld Income Tax | FICA Social Security Reserve | FICA Medicare Reserve |
| 3 | Dale Advertising | 74 | 85.00 | |||||
| 4 | City Treasurer | 75 | 35.00 | |||||
| 4 | Auto Parts, Inc. | 76 | 203.00 | 203.00 | ||||
| 4 | John E. Marks | 77 | 214.11 | 260.00 | (20.00) | (16.12) | (3.77) | |
| 6 | Henry Brown | 78 | 250.00 | |||||
| 6 | Mike's Deli | 79 | 36.00 | |||||
| 6 | Joe's Service Station | 80 | 74.50 | 29.50 | ||||
| 6 | ABC Auto Paint | 81 | 137.50 | 137.50 | ||||
| 7 | Henry Brown | 82 | 225.00 | |||||
| 14 | Telephone Co. | 83 | 27.00 | |||||
| 15 | National Bank (Tax Deposit) |
84 | 119.56 | 40.00 | 32.24 | 7.54 | ||
| 18 | National Bank | 85 | 90.09 | |||||
| 18 | Auto Parts, Inc. | 86 | 472.00 | 472.00 | ||||
| 18 | Henry Brown | 87 | 275.00 | |||||
| 18 | John E. Marks | 88 | 214.11 | 260.00 | (20.00) | (16.12) | (3.77) | |
| 21 | Electric Co. | 89 | 175.30 | |||||
| 21 | M.B. Ignition | 90 | 66.70 | 66.70 | ||||
| 21 | Baker's Fender Co. | 91 | 9.80 | 9.80 | ||||
| 21 | Petty Cash | 92 | 17.00 | 15.00 | ||||
| 21 | Henry Brown | 93 | 225.00 | |||||
| 25 | Baker's Fender Co. | 94 | 150.00 | 150.00 | ||||
| 25 | Enterprise Properties | 95 | 300.00 | |||||
| 25 | State Treasurer | 96 | 12.00 | |||||
| 25 | State Treasurer | 97 | 65.00 | |||||
| 3,478.67 | 1,083.50 | 520.00 | -0- | -0- | -0- | |||
| Bank service charge | 10.00 | |||||||
| Total | 3,488.67 | 1,083.50 | 520.00 | -0- | -0- | -0- |
Check Disbursements Journal (Continued)
| State Withheld Income Tax | Employer's FICA Tax | Electric | Interest | Rent | Telephone | Truck/Auto | Drawing | General Accounts | |
| Advertising | 85.00 | ||||||||
| License | 35.00 | ||||||||
| (6.00) | |||||||||
| 250.00 | |||||||||
| Holiday Party | 36.00 | ||||||||
| 45.00 | |||||||||
| 225.00 | |||||||||
| 27.00 | |||||||||
| 39.78 | |||||||||
| 18.09 | Loan | 72.00 | |||||||
| 275.00 | |||||||||
| (6.00) | |||||||||
| 175.30 | |||||||||
| Postage | 2.00 | ||||||||
| 225.00 | |||||||||
| 300.00 | |||||||||
| 12.00 | |||||||||
| Sales Tax | 65.00 | ||||||||
| -0- | 39.78 | 175.30 | 18.09 | 300.00 | 27.00 | 45.00 | 975.00 | 295.00 | |
| 10.00 | |||||||||
| -0- | 39.78 | 175.30 | 18.09 | 300.00 | 27.00 | 45.00 | 975.00 | 305.00 | |
Information courtesy of the Internal Revenue Service.
Sample Record System:
Daily Summary of Cash Receipts
Monthly Summary of Cash Receipts
Check Disbursements Journal
Employee Compensation Record
Annual Summary
Depreciation Worksheet
Bank Reconciliation
