The sales journal lists all credit sales made to customers. Sales returns and cash sales are not recorded in this journal. Entries in the sales journal typically include the date, invoice number, customer name, and amount. Invoices are the source documents that provide this information. In its most basic form, a sales journal has only one column for recording transaction amounts. Each entry increases (debits) accounts receivable and increases (credits) sales.
Notice the dates and posting references applied to each entry in the illustration to the right. Each day, individual sales journal entries are posted to the accounts receivable subsidiary ledger accounts so that customer balances remain current. Customer account numbers (or check marks if customer accounts are simply kept in alphabetical order) are placed in the sales journal's reference column to indicate that the entries have been posted. At the end of the accounting period, the column total is posted to the accounts receivable and sales accounts in the general ledger. Account numbers are placed in parentheses below the column to indicate that the total has been posted.
Many companies use a multi‐column (columnar) sales journal that provides separate columns for specific sales accounts and for sales tax payable. Each line in a multi‐column journal must contain equal debits and credits. For example, the entries in the sales journal to the right appear below in a multi‐column sales journal that tracks hardware sales, plumbing sales, wire sales, and sales tax payable. Individual entries are still posted daily to the accounts receivable subsidiary ledger accounts, and each column total is posted at the end of the accounting period to the appropriate general ledger account.
Notice the dates and posting references applied to each entry in the illustration to the right. Each day, individual sales journal entries are posted to the accounts receivable subsidiary ledger accounts so that customer balances remain current. Customer account numbers (or check marks if customer accounts are simply kept in alphabetical order) are placed in the sales journal's reference column to indicate that the entries have been posted. At the end of the accounting period, the column total is posted to the accounts receivable and sales accounts in the general ledger. Account numbers are placed in parentheses below the column to indicate that the total has been posted.
Many companies use a multi‐column (columnar) sales journal that provides separate columns for specific sales accounts and for sales tax payable. Each line in a multi‐column journal must contain equal debits and credits. For example, the entries in the sales journal to the right appear below in a multi‐column sales journal that tracks hardware sales, plumbing sales, wire sales, and sales tax payable. Individual entries are still posted daily to the accounts receivable subsidiary ledger accounts, and each column total is posted at the end of the accounting period to the appropriate general ledger account.
Not all sales involve the collection of cash; many stores allow customers to buy products on store credit using a store credit card. However, when a customer uses a bank-issued credit card, the bank, not the store or company making the sale, is who has to worry about collecting from the customer.
Store credit comes into play when a customer is allowed to take a store’s products without paying immediately because he has an account that’s billed monthly. This can be done by using a credit card issued by the store or some other method the company uses to track credit purchases by customers, such as having the customer sign a sales receipt indicating that the amount should be charged to the customer’s account.
Sales made on store credit don’t involve cash until the customer pays his bill. (In contrast, with credit card sales, the store gets a cash payment from the card-issuing bank before the customer even pays the credit card bill.) If your company sells on store credit, the total value of the products bought on any particular day becomes an item for the Accounts Receivable account, which tracks all money due from customers.
Not all sales involve the collection of cash; many stores allow customers to buy products on store credit using a store credit card. However, when a customer uses a bank-issued credit card, the bank, not the store or company making the sale, is who has to worry about collecting from the customer.
Store credit comes into play when a customer is allowed to take a store’s products without paying immediately because he has an account that’s billed monthly. This can be done by using a credit card issued by the store or some other method the company uses to track credit purchases by customers, such as having the customer sign a sales receipt indicating that the amount should be charged to the customer’s account.
Sales made on store credit don’t involve cash until the customer pays his bill. (In contrast, with credit card sales, the store gets a cash payment from the card-issuing bank before the customer even pays the credit card bill.) If your company sells on store credit, the total value of the products bought on any particular day becomes an item for the Accounts Receivable account, which tracks all money due from customers.
For transactions listed in the General Credit or General Debit columns, you should indicate an account number for the account into which the transaction is posted.
At the end of the month, the bookkeeper can just total the Accounts Receivable and Sales columns shown in the figure and post the totals to those General Ledger accounts. She doesn’t need to post all the detail because she can always refer back to the Sales journal. However, each invoice noted in the Sales journal must be carefully recorded in each customer’s account. Otherwise, the bookkeeper doesn’t know who and how much to bill.
Store credit comes into play when a customer is allowed to take a store’s products without paying immediately because he has an account that’s billed monthly. This can be done by using a credit card issued by the store or some other method the company uses to track credit purchases by customers, such as having the customer sign a sales receipt indicating that the amount should be charged to the customer’s account.
Sales made on store credit don’t involve cash until the customer pays his bill. (In contrast, with credit card sales, the store gets a cash payment from the card-issuing bank before the customer even pays the credit card bill.) If your company sells on store credit, the total value of the products bought on any particular day becomes an item for the Accounts Receivable account, which tracks all money due from customers.
Not all sales involve the collection of cash; many stores allow customers to buy products on store credit using a store credit card. However, when a customer uses a bank-issued credit card, the bank, not the store or company making the sale, is who has to worry about collecting from the customer.
Store credit comes into play when a customer is allowed to take a store’s products without paying immediately because he has an account that’s billed monthly. This can be done by using a credit card issued by the store or some other method the company uses to track credit purchases by customers, such as having the customer sign a sales receipt indicating that the amount should be charged to the customer’s account.
Sales made on store credit don’t involve cash until the customer pays his bill. (In contrast, with credit card sales, the store gets a cash payment from the card-issuing bank before the customer even pays the credit card bill.) If your company sells on store credit, the total value of the products bought on any particular day becomes an item for the Accounts Receivable account, which tracks all money due from customers.
- Date: The date of the transaction.
- Customer Account Debited: The name of the customer whose account should be debited.
- PR (post reference): Where the transaction will be posted at the end of the month. This information is filled in at the end of the month when you do the posting to the General Ledger accounts. If the entry to be posted to the accounts is summarized and totaled at the bottom of the page, you can just put a check mark next to the entry in the PR column.
For transactions listed in the General Credit or General Debit columns, you should indicate an account number for the account into which the transaction is posted.
- Invoice Number: The invoice number for the purchase.
- Accounts Receivable Debit: Increases to the Accounts Receivable account.
- Sales Credit: Increases to the Sales account.
At the end of the month, the bookkeeper can just total the Accounts Receivable and Sales columns shown in the figure and post the totals to those General Ledger accounts. She doesn’t need to post all the detail because she can always refer back to the Sales journal. However, each invoice noted in the Sales journal must be carefully recorded in each customer’s account. Otherwise, the bookkeeper doesn’t know who and how much to bill.
References:
- http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-i/subsidiary-ledgers-and-special-journals/special-journals
- http://college.cengage.com/accounting/mcquaig/college_acc/8e/students/demo/ch10.pdf
- http://www.dummies.com/how-to/content/using-a-sales-journal-to-record-noncash-transactio.seriesId-258045.html