The sale process carried out by commercial companies is to sell the goods that were purchased to make a profit. In this lesson, the method of recording the various sales operations will be explained according to the periodic inventory system and the continuous inventory system.
Record sales according to the periodic inventory system
When the establishment sells goods, an account is opened for the sale process called a sales account, which is credited with the value of the goods sold, and the sale process is either in cash or by check drawn on the bank or on the account as follows:
When the establishment sells goods, an account is opened for the sale process called a sales account, which is credited with the value of the goods sold, and the sale process is either in cash or by check drawn on the bank or on the account as follows:
Sales using credit cards - VisaCard, MasterCard
Some establishments use the sales system using master card and visa card or credit card, so the buyer who holds this card issued by the bank can buy goods using this card, and the bank then deducts the amount from his current account, as for the seller, he gets the value of his sales From the bank after the bank deducts its due commission, and the entry is recorded according to the agreement that was made between the seller and the bank at the time of collection, so if the agreement is that the seller gets his dues immediately from the bank, then the following entry is written:
But if the agreement between the seller and the bank is that the seller will receive his dues after a certain period, then the sale process is considered sales on the account, by writing two entries as follows:
Collecting amounts owed on credit cards
Sales on account with credit cards
Some countries impose sales tax on all types of establishments on goods and services sold, so that establishments compare sales tax on purchases and compare sales tax on goods sold and the difference is supplied to the tax officer, so when the establishment buys goods from the seller, it will pay him the value of the goods in addition to the value of the tax due On the goods, and when the establishment sells the goods to another buyer under an invoice, it will obtain from him the value of the goods in addition to the tax value, and the difference between the tax paid on purchases and the tax collected on sales is supplied to the tax officer, as follows:
Proof of purchases that include sales tax
Debtor creditor statement
Proof of purchases that include sales tax
Debtor creditor statement
of those mentioned
xxx
H / purchases or goods
xxx
h/ sales tax
xxx to h/box
The value of purchases and sales tax paid in cash
A sales proof entry that includes sales tax
Debtor creditor statement
xxx of h/box
to mentioned
xxx
h/ sales tax
xxx
h/ sales
Sales value and sales tax collected in cash
Pay the sales tax due on the due date
Debtor creditor statement
xxx
From h/sales tax
xxx to h/box
Pay the sales tax due in cash
Sales returns
The buyer may return the sold goods or part of them due to damage or because they do not conform to the specifications that were agreed upon. Then a special account called the sales returns account is opened and the value of the returned goods is owed as follows:
Debtor creditor statement
xxx
From h/ sales returns and their allowances
xxx to h/box
Sales returns paid in cash
Sales allowances
The process of returning the sold goods may require additional costs for the facility, so the facility requires the buyer to deduct the value of the damaged goods without refunding it. This process is called sales allowances and is treated as a sales return transaction as follows:
Debtor creditor statement
xxx
From h/ sales returns and their allowances
xxx to h/box
Cash sales are allowed
Sales discount
The accounting treatment of sales discounts differs according to the type of discount, some of which are recorded in the books and some that are not recorded. These types include commercial discount and cash discount.
Commercial discount
It is the discount that arises after a negotiation process takes place between the seller and the buyer to reduce the price of the commodity. This type of discount is not recorded in the books of the seller or in the books of the buyer, even if the value of the discount is present in the invoice.
It is the discount that arises after a negotiation process takes place between the seller and the buyer to reduce the price of the commodity. This type of discount is not recorded in the books of the seller or in the books of the buyer, even if the value of the discount is present in the invoice.
cash discount
It is the discount in which the seller is required to grant the discount if the buyer pays the value of his purchases before the due date or within an agreed period.
It is the discount in which the seller is required to grant the discount if the buyer pays the value of his purchases before the due date or within an agreed period.
Recording the earned cash discount
Debtor creditor statement
xxx
From h/ discount allowed
Debtor creditor statement
xxx
From h/ discount allowed
xxx to h/fund or debtors
Evidence of the permitted cash discount for previous sales of goods
Recording sales according to the continuous inventory system
According to the continuous inventory system, sales, sales returns and their allowances are recorded by recording two entries. In the first entry, the sale process or sales returns are recorded in the same periodic inventory system. The second entry is the cost of sales account on the debit side and the goods account on the credit side in case of sale. Either In the case of sales returns, the cost of sales account is recorded on the credit side and the goods account on the debit side as follows:
First: Recording sales according to the continuous inventory system
The first entry: sales are recorded
Debtor creditor statement
xxx
From h/the fund
Debtor creditor statement
xxx
From h/the fund
xxx to h/sales
Selling goods for cash
The second entry: the exit of the goods from the warehouses is evidenced
Debtor creditor statement
xxx
From h/cost of sales
xxx to h/goods
The cost of goods leaving the warehouse
Second: Recording sales returns according to the continuous inventory system
The first entry: sales returns are recorded
Debtor creditor statement
xxx
From h/ sales returns
Debtor creditor statement
xxx
From h/ sales returns
xxx to h/box
Sales returns received in cash
The second entry: the entry of the returned goods into the warehouses is recorded at the cost price
Debtor creditor statement
xxx
of h/ the goods
xxx to h/cost of sales
The cost of goods received into warehouses
Sales discounts (allowable discount) are recorded in the perpetual inventory system in the same way as they are recorded in the periodic inventory system.
Net sales
That the net built
That the net built
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