LESSON 10-1
Journalizing Sales on
Account Using a Sales
Journal
Original created by M.C. McLaughlin, Thomson/South-Western
Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School
CENTURY 21 ACCOUNTING © Thomson/South-Western
2
JOURNALIZING SALES ON ACCOUNT
USING A SALES JOURNAL
Purchases & sales of merchandise are the two
major activities of a merchandising business
A person or business to whom merchandise or
services are sold is called a customer
Laws of most states & some cities require that a
tax be collected from customers for each sale
made
A tax on a sale of merchandise or services is
called a sales tax
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
JOURNALIZING SALES ON ACCOUNT
USING A SALES JOURNAL
Business must file reports with the
proper government unit & pay the
amount of sales tax collected.
Every business collecting a sales tax
needs accurate records of the amount
of
Total sales &
Total sales tax collected
CENTURY 21 ACCOUNTING © Thomson/South-Western
4
SALES TAX
page 270
The amount of sales tax collected is a business
liability until paid to the government agency
The sales tax amount is recorded in a separate
liability account titled Sales Tax Payable, which has
a normal credit balance
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
5
SALES OF MERCHANDISE ON ACCOUNT page 271
A sale of merchandise
may be:
On account
For cash
Regardless of when
payment is made, the
revenue should be
recorded at the time of a
sale, not on the date cash
is received
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
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SALES OF MERCHANDISE ON ACCOUNT page 271
A sale for which cash will received at a later date
is known as a sale on account
A sale on account is also referred to as a charge
sale
Accounts receivable is an asset account with a
normal debit balance
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
7
SALES JOURNAL
page 272
oA special journal used to record only sales of
merchandise on account is called a sales journal
oThe special amount columns in this sales journal are
Accounts Receivable (Debit), Sales (Credit), & Sales Tax
Payable (Credit)
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
8
SALES INVOICE
page 272
A form describing the goods or services sold, the quantity, and the
price is known as an invoice
An invoice used as a source document for recording a sale on
account is known as a sales invoice. It is also known as a sales ticket
or sales slip
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
9
SALE ON ACCOUNT
page 273
November 3. Sold merchandise on account to Village Crafts, $540.00,
plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76.
1
2
3
4
5
6
1. Write the date.
2. Write the customer name.
3. Write the sales invoice number.
4. Write the total amount owed by the customer.
5. Write the sales amount.
6. Write the sales tax amount.
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
10
TOTALING, PROVING, AND RULING A
SALES JOURNAL
page 274
At the end of each month, businesses total, prove, and
rule its sales journal
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
11
TERMS REVIEW
page 275
 customer
 sales tax
 sales journal
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1