Cash Sales Journal Entry is the accounting entry made in the books of accounts, to record cash sales, i.e., sales transaction where payment has been received from the buyer at the time when the goods are transferred
Further, the Sales could be of an Asset, or trading goods. The Sales journal entries can therefore be divided in the following categories : –
- Sales of trading goods on cash
- Sales of an Asset for cash
Each of these are discussed as under : –
Cash Sales Journal Entry – Goods
Question 1:
What would be the Journal Entry for Sale of goods amounting to Rs. 10,000 in Cash ?
Explanation:
Since Sale of goods is an income, so, Sales A/c would be credited, because according to the Rules of Debit and Credit, an income A/c is credited .
Further , receipt of money for Sales of goods in Cash , results in increase of Cash, which is an Asset. When an asset is increased, the asset account is debited according to the Rules of Debit and Credit. So Cash A/c would be debited, as a increase in an Asset account is debited.
Hence the entry would be : –
Cash A/c Dr. 10,000
To Sales A/c 10,000
Cash Sales Journal Entry – Asset
Question 2 :
What would be the Journal Entry for Sale of Furniture amounting to Rs. 10,000 in Cash ?
Explanation:
Since Sale of Furniture results in an decrease in the value of furniture, Furniture A/c would be credited, because according to the Rules of Debit and Credit, an decrease in an asset A/c is credited .
Further , on Sales of Furniture in Cash , there is an in increase of Cash, which is an Asset. When an asset is increase, the asset account is debited according to the Rules of Debit and Credit. . So Cash A/c would debited.
Hence the correct entry is:
Cash A/c Dr. 10,000
To Furniture A/c 10,000
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