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Credit sales are transactions where the goods are sold and payment is received at a later date. The source documents for the Sales journal are copies of all invoices given to the debtors. Double entry Accounting is achieved by: Debit – debtors account with value of sales (increasing a current asset)
The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales. Notice that only credit sales of inventory and merchandise items are recorded in the sales journal. Cash sales of inventory are recorded in the cash receipts journal.
In double-entry bookkeeping, a sale of merchandise is recorded in the general journal as a debit to cash or accounts receivable and a credit to the sales account. [3] The amount recorded is the actual monetary value of the transaction, not the list price of the merchandise.
The oldest cost (i.e., the first in) is then matched against revenue and assigned to cost of goods sold. Last-In First-Out (LIFO) is the reverse of FIFO. Some systems permit determining the costs of goods at the time acquired or made, but assigning costs to goods sold under the assumption that the goods made or acquired last are sold first.
5.1.5 Increase (Decrease) In Inventories Of Finished Goods And Work In Progress (Dr / Cr) 5.1.6 Other Work Performed By Entity And Capitalized (Cr) 5.2.0 Expenses Classified By Function (Dr) 5.2.1 Cost Of Sales (Dr) 5.2.2 Selling, General And Administrative (Dr) 5.2.3 Credit Loss (Reversal) On Receivables (Dr / Cr)
A general journal is a daybook or subsidiary journal in which transactions relating to adjustment entries, opening stock, depreciation, accounting errors etc. are recorded. The source documents for general journal entries may be journal vouchers, copies of management reports and invoices.
A journal entry is the act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company's debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit. The total of the debits must equal the ...
Cost of Goods Sold (COGS) / Cost of Sales - represents the direct costs attributable to goods produced and sold by a business (manufacturing or merchandizing). It includes material costs , direct labour , and overhead costs (as in absorption costing ), and excludes operating costs (period costs) such as selling, administrative, advertising or R ...