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 :

Journal Entry for Cash Sale of Goods.

Ledger Posting :

In Cash Ledger/Cash Book.

Cash Sale of Goods - Posting Cash Ledger/Cash Book.
In Sales Ledger/Sales Account.

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

Recording in Sales Register.

Cash Sale of Goods - 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

Journal Entry for Cash Sale of Goods.

Ledger Posting :

In Cash Ledger/Cash Book.

Cash Sale of Goods - 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.

Cash Sale of Goods - 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 :

Journal Entry for Cash Sale of Goods(Receipt through Bank Account)

Ledger Posting :

In Bank Ledger/Bank Book.

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

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

Recording in Sales Register.

Cash Sale of Goods(Receipt through Bank 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

Journal entry for Cash Sale of Goods(Receipt through Bank Account)

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.

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

Recording in Sales Register.

Cash Sale of Goods(Receipt through Bank 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 :

Journal Entry for Credit Sale of Goods.

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.

Credit Sale of Goods - 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

Journal Entry for Credit Sale of Goods.

Ledger Posting :

In Maa Barunei Sevashram Account.

Credit Sale of Goods - Posting in Sundry Debtor's Account.

In Sales Leger Account.

Credit Sale of Goods - Posting in Sales Ledger Account.

Recording in Sales Register.

Credit Sale of Goods - Recording in Sales Register.

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Location: Cuttack, Odisha, India

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