Journal Entry of Sales

Journal entry of sales

For every business sales is very important. Sales include any kind of product or services. Business is totally depend on sales. In accounting we need to record sales in journal entry.  On the basis of sales business takes a decision of new purchase or production of items. 
Sales journal entry depended on amount received from customers in cash or on credit. Sales journal entry recording the transaction goods goods or services sold to customer for cash or on credit. Sales journal entry divided into two types. First one is cash sales and second one is credit sales.

1) Journal entry for cash sales

When business receive cash from the customers for sale of goods or services offered to customers. For this transaction we need to pass the journal entry that is

Cash account Debit

Sales account Credit

In this journal entry cash is Real account so Real account principle debit what comes in is applied in this case cash is coming in. Sales is nominal account credit all income and gains. This entry reflects increase in cash and increase in revenue of a business.

2) Journal entry of credit sales.

When goods and services sold to customers on the basis of credit we need to pass journal entry of credit sales.

Debtors Account Debit

Sales Account Credit


For example

Sold goods to Mr.ABC on credit. 

Mr. ABC Account Debit

Sales Account Credit

When customers repay the amount in cash or cheque. We need to pass the journal entry

Cash/ Bank Account Debit

Mr. ABC Account Credit

(Being amount received from Mr. ABC)

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