ZIMSEC O Level Principles of Accounts Notes: Books of Original Entry: Sales Journal and the Sales Ledger
- When cash or other payments e.g. Ecocash/Visa/MasterCard is received when goods are sold such as transaction is known as a cash sale.
- For accounting purposes we do not need to know the name of the customer in such instances and as such cash sales are not recorded in the Sales Day Book.
- The Sales Day Book is, like all the other books, used only to record credit transactions in this instance credit sales.
- Credit sales are quite common even in small businesses like tuckshops.
- In most instances credit sales often exceed cash sales and form the largest part of sales.
- For each sale a Sales Invoice is issued.
- There are two ways to view a transaction for example:
- If J Jimu buys goods on credit from S Muti for $500 :
- In the eyes of J Jimu this is a purchase for which he receives a Purchases Invoice.
- In the eyes of S Muti this is a Sale and the transaction is recorded in the Sales Ledger after a Sales invoice has been issued and the transaction recorded in the Day Book.
- In this topic we will look at transactions from the perspective of the business selling goods.
- Each invoice has a unique number, usually they are numbered in a sequential fashion.
- Each invoice is then entered up in the Sales Day Book.
- This book is merely a list of details relating to each credit sale listing:
- Date on which the transaction took place.
- Name of customer in the Details column.
- Invoice number column
- A Folio column to record the Sales Ledger reference number.
- Final amount of invoice.
- “Sales Day Book” and “Sales Journal” are different names for the same book.
- After they are recorded in Sales Day Book the credit sales are then now posted, one by one, to the debit side of each customer’s account in the Sales Ledger.
- At the end of each period the total of the credit sales is posted to the credit side of the Sales.
- Account in the General Ledger.
- Amounts recorded in the books must exclude Trade Discounts i.e. the amounts recorded in the Sales Day Book and consequently the Sales Account and the various Debtors’ Accounts in the Sales Ledger must be net of Trade Discount.
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