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.