Bookkeeping for Credit Sales: Difference between revisions
Created page with "When recording credit sales in the accounts these get recorded in the sales day book. At the end of each month the sales day book gets totalled and the figures transferred into the general ledger accounts using the rules of DEAD CLIC. If VAT is involved three entries will be recorded rather than two to make the figures balance: # The full amount as a debit in the Receivables Ledger Cont..." |
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At the end of each month the [[Sales Day Book|sales day book]] gets totalled and the figures transferred into the [[General (Main/Nominal) Ledger|general ledger accounts]] using the rules of [[DEAD CLIC]]. | At the end of each month the [[Sales Day Book|sales day book]] gets totalled and the figures transferred into the [[General (Main/Nominal) Ledger|general ledger accounts]] using the rules of [[DEAD CLIC]]. | ||
If VAT is involved three entries will be recorded rather than two to make the figures balance: | If [[Value Added Tax (VAT)|VAT]] is involved [[three]] entries will be recorded rather than [[two]] to make the figures balance: | ||
# The full amount as a [[debit]] in the [[Receivables Ledger Control Account]] | # The full amount as a [[debit]] in the [[Receivables Ledger Control Account]] | ||
# The total amount as a [[credit]] in the [[Sales Account]] | # The total amount as a [[credit]] in the [[Sales Account]] | ||
# The [[Value Added Tax (VAT)|VAT]] amount as a credit in the [[Value Added Tax Account|VAT account]] | # The [[Value Added Tax (VAT)|VAT]] amount as a [[credit]] in the [[Value Added Tax Account|VAT account]] | ||
In this case the debit equals the value of the sale plus the VAT (the two credits). This illustrates that whilst the number of transactions may not be the same the balance of debits and credits must balance. | |||
Finally, the individual amounts need to be transferred to the [[Receivables (Sales) Ledger|receivables ledger]] for each customer so the owner can see how much each credit customer owes. | |||
Latest revision as of 03:42, 2 September 2025
When recording credit sales in the accounts these get recorded in the sales day book.
At the end of each month the sales day book gets totalled and the figures transferred into the general ledger accounts using the rules of DEAD CLIC.
If VAT is involved three entries will be recorded rather than two to make the figures balance:
- The full amount as a debit in the Receivables Ledger Control Account
- The total amount as a credit in the Sales Account
- The VAT amount as a credit in the VAT account
In this case the debit equals the value of the sale plus the VAT (the two credits). This illustrates that whilst the number of transactions may not be the same the balance of debits and credits must balance.
Finally, the individual amounts need to be transferred to the receivables ledger for each customer so the owner can see how much each credit customer owes.