Question

journal entry: - sold goods on credit​

Answer 1

Answer:

Your credit sales journal entry should debit your Accounts Receivable account, which is the amount the customer has charged to their credit. And, you will credit your Sales Tax Payable and Revenue accounts.

Answer 2

ANSWER :

❖ The journal entry for "Goods sold on credit" is :-

$\mapsto : \: \: \sf{ \large{Debtor's \: \: A/C \: \: \: \: \: Dr. \: \: \: \: (Amount) }} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \: \: \: \: \: \: \: \:\sf{ \large{To \: \: Sales \: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: (Amount) }} \\ \\ \sf{ \large{[ \: Being \: \: goods \: \: sold \: \: on \: \: credit \: ]}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \:$

EXPLANATION :

When a business sold goods on credit, the business doesn't get cash immediately. The buyer is liable to pay the amount of goods in some later period and he becomes a Debtor for the business.

❖ The three steps involved in the process of journalising the given transaction is as follows :-

• Step 1. Identification of accounts : In this transaction, the business has sold goods on credit. It means there is an exchange of goods between the seller and buyer on credit. Therefore, the two accounts involved in this transaction are : Sales A/C and Debtor's A/C.

• Step 2. Classification of accounts : According to Modern Approach of accounts classification, Sales A/C is a Revenue Account and Debtor's A/C is an Asset Account.

• Step 3. Application of Debit and Credit rules : When goods sold on credit, the revenue in the form of Sale increases and hence, the Sales A/C will be credited (as per the rule being revenue increases : credited). Again, asset in the form of Debtor increases and hence, the Debtor's A/C will be debited (as per the rule being asset increases : debited)