Question

Journal entry for Goods sold for cash 7,000 and half of the sale proceeds deposited in bank

Answer 1

Answer:

Journal 1 - Debit Undeposited Funds (or Cash Received if you have an Asset account set up under this kind of name)/Credit Income Account (whatever your Income account is in your chart) - this highlights that you have sold something and the buyer has paid you cash for it (which is currently “sitting in your pocket” so to speak).

Journal 2 - Credit Undeposited Funds (or Cash Received)/Debit Bank Account - this highlights that you have taken the cash “out of your pocket” and put it in to your bank account.

I hope this helps.