Sales (Journal) Book

All credit sales of merchandise are recorded in the Sales (Journal) Book. Cash sales are never entered here — they go into the Cash Book. This journal is the mirror image of the Purchases Book: where the Purchases Book records goods bought on credit, the Sales Book records goods sold on credit.

The source document for every entry is the sales invoice (or bill) that the firm issues to the customer. The invoice contains the date of sale, invoice number, customer’s name, amount, and terms of payment. Two or more copies of each invoice are prepared; the bookkeeper uses one copy to make the entry in the Sales Book.

A common addition to the format is a separate column for sales tax recovered from the customer, which the firm must later pay to the government. The basic format, however, is shown below.

Periodically — usually at the end of each month — the amount column is totalled. This total is posted to the credit of the Sales Account in the ledger. The individual customer’s accounts, however, are posted daily to their debit side.

Worked Example

M/s Koina Supplies sold the following items on credit:

1. Two water purifiers @ ₹2,100 each and five buckets @ ₹130 each to M/s Raman Traders (Invoice no. 178, dated April 06, 2017).
2. Five roadside containers @ ₹4,200 each to M/s Nutan Enterprises (Invoice no. 180, dated April 09, 2017).
3. 100 big buckets @ ₹850 each to M/s Raman Traders (Invoice no. 209, dated April 28, 2017).

Calculations for the amounts:

• Invoice 178: (2 × 2,100) + (5 × 130) = 4,200 + 650 = ₹4,850
• Invoice 180: 5 × 4,200 = ₹21,000
• Invoice 209: 100 × 850 = ₹85,000

These are entered in the Sales Book as follows.

Posting to the Ledger

Each customer’s account is debited with the amount of the sale made to them. This is done daily. The total of the Sales Book (₹1,10,850) is credited to the Sales Account at the end of the month.

Raman Traders Account

Nutan Enterprises Account

| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) |

|------|-------------|------|-------------|------|-------------|------|-------------| …