Sales of Goods without charging indirect tax like GST/VAT(Books of Account with Journal Entry)

Now let's come to discuss about the Accounting treatment for Sale of Goods with Journal Entry when Indirect Taxes like GST/VAT is not charged.

Sale of Goods is an important part of Income of a Trading/Manufacturing business. To record transactions for sale of goods of a business organization one have to know the points given below.

Preparation of Sales Invoice/Cash Memo/Bill.

Passing and recording Journal Entry into the Journal Register/Journal Book.

Posting the corresponding Ledger Account from the Journal Register.

Recording in Sales Register etc.

When Goods are sold on immediate Cash Receipt i.e Cash Sale of Goods.

Debit Account - Cash Account.
Credit Account - Sales Account.

Journal Entry :

Ledger Posting :

In Cash Ledger/Cash Book.

Cash Sale of Goods - Posting Cash Ledger/Cash Book.

In Sales Ledger/Sales Account.

Recording in Sales Register.

Example :

In the Books of M/s.Lotus Ayurveda, Puri, Odisha, Goods sold for Cash to M/s.Bharat Swasthya Seva, Cuttack, Odisha for ₹39,000/- as per Cash Memo No. 720 dt.19/07/2021.

Journal Entry :

M/s. Lotus Ayurveda

Puri, Odisha

Ledger Posting :

In Cash Ledger/Cash Book.

In Sales Ledger/Sales Account.

Cash Sale of Goods - Posting in Sales Account/Sales Ledger.

Recording in Sales Register.

When Goods are sold on immediate Cash Receipt(Receipt through Bank Account) i.e Cash Sale of Goods(Receipt through Bank Account).

Debit Account - Bank Account.
Credit Account - Sales Account.

Journal Entry :

Ledger Posting :

In Bank Ledger/Bank Book.

In Sales Ledger/Sales Account.

Recording in Sales Register.

Example :

In the Books of M/s.Lotus Ayurveda, Puri, Odisha, Goods sold to M/s.Amrit Bhandar, Rourkela, Odisha for ₹88,500/- as per Cash Memo No. 811 dt.31/07/2021. Amount received through NEFT credit to IDBI Bank CA No-21003150431.

Journal Entry :

M/s. Lotus Ayurveda

Puri, Odisha

Ledger Posting :

In IDBI CA No-21003150431 Ledger Account.

Cash Sale of Goods(Receipt through Bank Account) - Posting in Bank Ledger/Bank Account.

In Sales Ledger/Sales Account.

Recording in Sales Register.

When Goods are sold on Credit i.e Credit Sale of Goods.

Debit Ledger - Party/Buyer/Sundry Debtor Account
Credit Ledger - Sales Account

Journal Entry :

Ledger Posting :

In Sundry Debtor Account.

Credit Sale of Goods - Posting in Sundry Debtor Ledger Account.

In Sale Ledger Account.

Credit Sale of Goods - Posting in Sales Account.

Recording in Sales Register.

Example :

In the Books of M/s.Lotus Ayurveda, Puri, Odisha, Goods sold to Maa Barunei Sevashram, Khurda, Odisha for ₹1,19,420/- as per Invoice No. 887 dt.30/08/2021.

Journal Entry :

M/s. Lotus Ayurveda

Puri, Odisha