Sales Journal

Sales Journal or Sales Day Book – Definition and Explanation:

The sales of goods may be on cash or on credit basis. Cash sales are recorded in cash book, whereas sales journal sometimes called sales day book is used to record credit sales.

Preparation Procedure of Sales Journal and its Format:

The sales journal is prepared from copies of sales invoices which show the values after deduction of any trade, vary from business to business. Sales invoice show the same basic information and include name of the company on the top with name of the customer, the rates, quantities and total amounts of goods sold. Though the original invoice is given to the customer but its copy is retained by the business to record credit sales in the sales journal. Follow the given preparation steps:

(i) Credit sales

(ii) Copies of sale invoice

(iii) Recording in sales journal, as:

(a) Individual amounts posted to debit side of customers’ accounts in sales ledger.

(b) Total amounts posted to credit side of sales account in general ledger.

The following sales journal format use by businesses:

sales journal format easy


(i) References to the relevant ledger account (often called folio).

(ii) One extra column may be add in the sales journal according to situation or treatment. This extra column is sales tax column.

Procedure of Posting Entries from Sales Journal to Sale Ledgers:

Businesses usually have a separate sales ledger containing all the trade receivables (customers) accounts.

Credit sales recorded in the sales journal are posted on the debit side of each customer’s account in the sales ledger on individual basis. In addition, at the end of each period, the total amount of credit sales is credited to the sales account in the general ledger. Sales journal can be explained with the help of following example:

Solved Example:

The following is a sales journal of a business for January 2019:

Sales Journal (Sales Day Book):

sales journal ledger updated


Explain the above sales journal and posting its items to sales ledger and general ledger:


The double entry is completed by debiting the appropriate accounts of customers in the sales ledger and crediting the total amount to sales account in the general ledger. This is shown in the following accounts.

Sales Ledger:

sales ledger

General Ledger (Sales Account):

sales account general ledger

Definition of Trade Discount:

Trade discount is the difference between the list price of the goods sold and the traded reduced price. This is allowed by a supplier or by a customer in the following circumstances.

(i) When goods are sold to a fellow trader.

(ii) When goods are sold in bulk.

(iii) When goods are sold to an old customer.

(iv) When giving trade discount is a custom of trade.

Sales on Credit Card Treatment in Sales Journal:

As there is no instant receipt of cash on account of sales on credit card so these sales are recorded (treated) as credit sales in sales journal. Name of the credit card company would appear as a trade receivable in the sales journal with the amount to be received from credit card company.