Journal Entry Distributions—Sales/Invoicing
Sales/Invoicing transactions are posted to the General Ledger in the following manner:
Sales Journal
|
Transaction |
Debits |
Credits |
|---|---|---|
|
Invoice on account |
Accounts Receivable* |
Sales Income, Freight, and Sales Tax Payable |
|
Credit memo |
Sales Income, Freight, and Sales Tax Payable |
Accounts Receivable* |
|
Finance Charge |
Accounts Receivable* |
Finance Charge Income |
|
Sale of non-stock, labor or service items |
Cost of Sales |
Salary and Wage Expense (or miscellaneous item expense) |
|
Sale of stock or assembly items |
Cost of Sales |
Inventory |
Cash Receipts Journal
|
Transaction |
Debits |
Credits |
|---|---|---|
|
Cash sale (payment made directly on invoice) |
Cash |
Accounts Receivable* |
*For companies using the cash-basis accounting method, Accounts Receivable is replaced with <Cash Basis> and is not recorded in the General Ledger. Instead, income and cash are recorded when payment is received for the sale.