Journal Entry for Credit Sales

Journal Entry for Credit Sales

Journal entry for credit shall be recorded in the books of accounts by debiting the receivable (individual receivable account of customer to who credit sales made) and crediting the sales. The receivable account is debited being increase in asset and sales account is credited being increase in income.

Date	Particular	Ledger Folio	Dr.	Cr.
21-01-2014	Receivables		xxx
21-01-2014	Sales			xxx

Examples for Journal Entries for Credit Sales

1.    Credit Sales made to Farhan of PKR. 120,000.

2.    Credit Sales made to Hira of PKR 352,000.

3.    Sales of 300,000 made to Jimmy on Credit.

In first transaction the individual account of Farhan shall be debited being increase in the receivable (asset) and sales income shall be credited.

Date	Particular	Ledger Folio	Dr.	Cr.
02-03-2013	Farhan		120,000
02-03-2013	Sales			120,000

In second transaction the individual account of Mr. Hira shall be debited under the asset rule for recording the journal entry and sales income shall be credit under the income rule for recording the journal entry.

Date	Particular	Ledger Folio	Dr.	Cr.
14-03-2015	Hira		352,000
14-03-2015	Sales			352,000

Jimmy account would be debited being receivable or increase in receivable and sales would be credited being income or increase in income.

Date	Particular	Ledger Folio	Dr.	Cr.
14-03-2015	Jimmy		352,000
14-03-2015	Sales			352,000

The following journal entries recording rules of debit & credit were applied to record the above transactions.

·         Increase in income is Credit. (Sales is income)

·         Increase in asset is Debit. (Receivable is an asset)