Sales Journal:
Definition and Explanation:
When a
business supplies goods to a customer, an invoice is
made out. The top copy is sent to the purchaser who
records it in his purchase journal. The delivery of
the goods will new take place, but meanwhile the
seller who made out the invoice has to record the
transaction in his book. The book in which he
records the transactions is called "sales journal".
Sales journal is also called sales book.
The second copy of the invoice, which is retained by
the seller, will be entered into his book of
original entry.
There
are so many customers to whom goods are sold in a
day. So every day a bundle of invoices made out by
the invoice department of the seller, whose top
copies have already been sent to the purchasers,
will be given to the sales journal clerk, who will
enter them in the sales journal.
The
ruling of the sales journal is exactly the same as
the
purchase journal, and is illustrated below:
Suppose, on 20.1.2005, we sold to W & Co. 10 cartons
of soap @ $300 per carton. We made out an invoice
and sent the top copy of the invoice to W & Co. The
second copy of the invoice is retained by us. This
transaction is recorded in the sales journal on the
basis of this copy. The sales book will be as
follows:
Sales Journal
Date |
Description |
Invoice No. |
L/F |
Details $ |
Amount $ |
20.1.2005 |
W & Co.
10 cartons of soap @ $300 per carton
Less trade discount |
262 |
DL16 |
3000
Nil |
3,000
------------
3000 |
Explanation:
The
difference columns of sales journal or sales book
are explained as follows:
-
Date: The date of the sales goods is
written in this column.
-
Description: The name the person or business to
whom goods are sold, details of goods sold etc. are
written in this column.
-
Invoice No: The serial No. of the invoice (262)
is written in this column.
-
Ledger
Folio: When goods are sold to a customer, his
account is opened in debtor's ledger (DL denotes
debtor's ledger) in the name of the customer. The page
No. (16) of the ledger where the account has been opened
is written in this column.
-
Details: This column shows how the net price of
goods is ascertained after deducting trade discount (if
allowed).
-
Amount:
The net price of the goods is written in this column.
Example:
Enter the
following transactions into sales journal:
-
June 4, 2005,
sold on credit to O:
10 tables @ $150
30 chairs @ $100
-
June 11, 2005,
sold on credit to S:
1 dining table @@ $1,500
-
June 30, 2005,
sold on credit T restaurant:
100 chairs @ $150
20 tables @ $200
-
The trader offers
trade discount at the following rates:
Sales up to $2000 - 5%
Sales beyond $2000 - 10%
Sales Journal (Book)
Folio (Page 12)
Date |
Description |
Invoice No. |
L/F |
Details $ |
Amount $ |
4.6.2005 |
O.
10 tables @ $150
30 chairs @ $100
Less 10% trade discount |
135
|
DL-15 |
1500
3000
---------
4500
450
--------- |
4050 |
11.6.2005 |
S.
1 dining table @ $1500
Less 5% trade discount |
136 |
DL-17 |
1500
75
--------- |
1425 |
30.6.2005 |
T restaurant.
100 chairs @ $150
20 tables @ $200
Less 10% trade discount |
137 |
DL-19 |
15000
4000
---------
19000
1900
--------- |
17100 |
30.6.2005 |
Sales
account
Cr. |
|
GL-30 |
|
22575 |
Ledger
S A/C (Folio
17)
O A/C
(Folio 15)
|
|
T Restaurant
A/C (Folio 19)
30.6.2005
Sales A/C
17,100 |
|
Sales A/C
(Folio 30)
|
30.6.2005
Sundry Debtors A/C 22575 |
|
It must be noted that sales account has
not been credited thrice on three different dates. Instead, it has been
credited with the total amount of the three sales aggregating $22575
(4050 + 1425 + 17100) at a time at the end of the month. The three other
accounts (O, S and T Restaurants) are debited individually.
You should note
that the double entry is perfect. We have debited
three accounts separately which totaled $22,575, the
exact amount is credited to sales account
collectively. Relevant
Articles:
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