Sales journal

Sales journal is used to record the merchandise sold on account. Any entry relating to sale of merchandise for cash is recorded in cash receipt journal.

Format of sales journal

Sales journal has five columns to record necessary information relating to credit sales. Its format is given below:

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(1). Date column is used to record the date of sales made on account.

(2). Account debited column is used to record the title of customers (account title) to whom merchandise are sold on account.

(3). Invoice number column is used to record the invoice number relating to credit sale.

(4). Posting reference column is used to record the account numbers at the time of posting entries from sales journal to ledger accounts.

(5). Amount column is used to record the amount of merchandise sold.

Posting entries from sales journal to ledgers

The entries from sales journal are posted to accounts receivable subsidiary ledger and general ledger. The posting procedure is explained below:

  1. At the end of each month or at fixed intervals, the amount column of the sales journal is added and the total is posted as debit to accounts receivable and credit to sales account in the general ledger.
  2. The individual entries in sales journal are posted to respective accounts in the accounts receivable subsidiary ledger.

Example

The transactions relating to sale of merchandise on account completed by Crescent company during the month of March 2016 are shown below:

Mar. 01: Sold merchandise on account to Z & Co. $1,120, invoice No. 110.
Mar. 08: Sold merchandise on account to John & Sons $3,140, invoice No. 111.
Mar. 20: Sold merchandise on account to John & Sons $6,400, invoice No. 112
Mar. 28: Sold merchandise on account to Sam Corporation $2,300, invoice No. 113

Required:

  1. Record the above transactions in sales journal.
  2. Post the entries from sales journal to accounts receivable subsidiary ledger and general ledger.
  3. Prepare a schedule of accounts receivables.

Solution

(1). Sale journal:

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Accounts receivable subsidiary ledger:

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General ledger:

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Schedule of accounts receivable:

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