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accounting is the process of recording financial transactions for the company. This transaction will eventually provide the core information on the construction of the income statement and balance sheet for the company. As part of this accounting, the accountant must take all revenue and expenditure for the company, whether in cash or on credit. The revenue for the company is generated from the sale of its products or services. Sales record for most businesses can be maintained easily with the help of a simple sales daybook, which is basically a list of all invoices issued in a particular period or year. However, with larger companies, a variety of accounting case recording and tracking sales; This may include sales daybook (as already mentioned), sales ledger, debtors or accounts receivable account and bank / cash Ledger
Sales business can generally be divided into two types. credit sales and cash sales.
Credit sales
If the customer has credit terms with your business, where products or services are sold without any right to receive payment, these are called credit sales. When dealing with credit sales it needs to be properly accounting instead. Indeed, when customers order goods or services on credit are several accounting implications that need to be accounted for.
sales invoice is raised in the name of the client when the products are shipped from the supplies or services are provided. You make an entry in the name of the customer in accounts receivable / debtors ledger and also entry into the sales ledger. The inventory records should also reflect the movement of physical stock. The bill is sent to the client to keep their accounts updated with respect to trade. Once the money is received from the customer account, then this should be offset against the initial entry in the accounts receivable ledger. The sales ledger and bank / cash ledger should reflect the payment at the same time.
Cash sales
Keep track of cash sales through the books and records is simpler compared to accounting for credit sales. Cash sales are those in which goods or services are purchased and paid for at the same time by the customer. Consequently, only two accounts are affected by this kind of sale they are sales ledger and bank / cash ledger. Of course, just as credit sales, inventory and stock records must reflect the transmission of physical products to customers. All sales made for cash is registered in the sales ledger and check or cash is recorded as an entry in the bank / cash ledger. Account and / or receipt shall be issued to the customer information about the products or services sold and also to recognize the payment.
Recording credit sales and cash sales properly are a very important part of the books. The main thing to remember is that by accurately recording the transaction in its books and records of the company you are able to create a sound audit. This audit trail will allow you to manage your business more efficiently and effectively, and also give you greater financial control over the company.
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