In any type of business, record of sale is so important. Because on the basis of sales record, we take the decisions of new purchase and production. So, for records of sales, we need to pass the journal entries of sales. For these journal entries, we deem sales as the inventory sales. It is our revenue item and it is not capital revenue.
Following are the Main Journal Entries for Record of Sales
1. Journal Entry for Cash Sales
When we sell the goods on the basis of cash, we need not record our customers. We already know to whom we sold the goods. Just pass following journal entries when you pay the money for buying.
Bank / Cash Account Debit
Sales Account Credit
2. Journal Entry for Credit Sales
When we sell on credit basis instead of cash, we need to record the detail of debtor. Because with this, we can receive money from our debtors in future. We want to know what balance of our debtors in our books, This is our current asset.
Debtor Account Debit
Sale Account Credit
3. Journal Entry for Sales with excise duty
If any manufacturer sells to other dealer or manufacturer, there will apply the rule of excise duty. For changing the rates of excise duty, you should get updates of your current year budget. As per businessman, received or receivable excise duty with sales which will be our current liability. First of all Excise duty will be receivable from debtors. Then, Difference of excise duty paid on purchase and excise duty received on sale will be deposited in Govt. Department. More journal entries of excise duties, you can learn at Journal Entries of Excise Duties.
Debtor Account Debit
Excise Duty on Sales Account Credit
Sales Account Credit
4. Journal Entry of Sales Return
If you have received returned goods due to scrap or any default, it will be your sales return, following entry will pass
Sales Return Account Debit
Bank/Cash / Debtor Account Credit
5. Journal Entry of Sales return with Excise Duty
If there is purchase return and sale return, then net payable amount to Govt. account will adjust from these two major factor. First you should understand the sales return entry with excise duty.
Sales Return Account Debit
Excise duty on Sales Return Account Debit
Debtor Account Credit
6. Journal Entry of Sales with VAT
When Goods are sold and you have to receive both sale value and VAT output or VAT on sales both, at that time, following journal entry will be passed.
Bank / Cash / Debtor Account Dr. (Value of Sales + VAT Output)
VAT Output Account Cr. ( VAT on Sales)
Sales Account Cr. (Value of Sales )
Reason of this Journal Entry :
We have sold goods the goods, it will decrease our current asset. Decrease of asset will always credit. VAT output is also our current liability because We have to receive VAT output for paying govt. More learn about VAT journal entries.
7. Sales return with VAT
If there is sales return, VAT output account will cancel on the basis of sales return amount.
Sales Return Debit (Value of sales return)
VAT Output on sales return Account Debit (Value of Vat output on sales return)
Bank/ Cash/ Debtor Account Credit ( Value of sales return + VAT on sales return)
In brief
Following are the Main Journal Entries for Record of Sales
1. Journal Entry for Cash Sales
When we sell the goods on the basis of cash, we need not record our customers. We already know to whom we sold the goods. Just pass following journal entries when you pay the money for buying.
Bank / Cash Account Debit
Sales Account Credit
2. Journal Entry for Credit Sales
When we sell on credit basis instead of cash, we need to record the detail of debtor. Because with this, we can receive money from our debtors in future. We want to know what balance of our debtors in our books, This is our current asset.
Debtor Account Debit
Sale Account Credit
3. Journal Entry for Sales with excise duty
If any manufacturer sells to other dealer or manufacturer, there will apply the rule of excise duty. For changing the rates of excise duty, you should get updates of your current year budget. As per businessman, received or receivable excise duty with sales which will be our current liability. First of all Excise duty will be receivable from debtors. Then, Difference of excise duty paid on purchase and excise duty received on sale will be deposited in Govt. Department. More journal entries of excise duties, you can learn at Journal Entries of Excise Duties.
Debtor Account Debit
Excise Duty on Sales Account Credit
Sales Account Credit
4. Journal Entry of Sales Return
If you have received returned goods due to scrap or any default, it will be your sales return, following entry will pass
Sales Return Account Debit
Bank/Cash / Debtor Account Credit
5. Journal Entry of Sales return with Excise Duty
If there is purchase return and sale return, then net payable amount to Govt. account will adjust from these two major factor. First you should understand the sales return entry with excise duty.
Sales Return Account Debit
Excise duty on Sales Return Account Debit
Debtor Account Credit
6. Journal Entry of Sales with VAT
When Goods are sold and you have to receive both sale value and VAT output or VAT on sales both, at that time, following journal entry will be passed.
Bank / Cash / Debtor Account Dr. (Value of Sales + VAT Output)
VAT Output Account Cr. ( VAT on Sales)
Sales Account Cr. (Value of Sales )
Reason of this Journal Entry :
We have sold goods the goods, it will decrease our current asset. Decrease of asset will always credit. VAT output is also our current liability because We have to receive VAT output for paying govt. More learn about VAT journal entries.
7. Sales return with VAT
If there is sales return, VAT output account will cancel on the basis of sales return amount.
Sales Return Debit (Value of sales return)
VAT Output on sales return Account Debit (Value of Vat output on sales return)
Bank/ Cash/ Debtor Account Credit ( Value of sales return + VAT on sales return)
In brief
IN FIRM BALANCE SHEET LIABILITIES SIDE,
ReplyDeleteDEBIT BALANCE IS SHOWN OF RS. 4736/- UNDER THE HEAD SECURED LOANS SINCE TWO YEARS
THIS IS A TDS AMOUNT THAT WE DEDUCTED BUT NOT RECEIVED FROM PARTY
SO PLEASE TELL ME HOW TO HANDLE THIS ENTRY OF THIS F.Y
SO, THIS IS NOT SHOWN IN THIS F.Y
HOW TO HANDLE THIS PROBLEM
What is the journal entry of sold goods to mehtab?
ReplyDeleteMehtab a/c DEBIT
DeleteSales a/c CREDIT