Cash Sales Journal Entry With Example

Here we study about Cash Sales Journal Entry With Example.

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Cash Sales includes those business transactions that include Cash and not recorded on Credit basis and hence there is not involvement of Accounts Receivable or Debtors. Instead, we are considering only Cash Transactions. There are two Accounting Systems for Recording Business Transactions.

1. Cash Basis of Accounting and 2. Accrual Basis of Accounting

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Cash Sales Journal Entry follows Cash Basis of Accounting rather than Accrual Basis of Accounting. When goods are sold for Cash, then Cash Sales Transactions are recorded. In this Case, in Journal, Cash is Debited as Cash increased And Sales is Credited as Sales increased from the point of view of our business.

We Record the following Business Transaction in the Book or Journal of the Company:

Cash a/c  XXX

                      Sales a/c   XXX

Here Cash is a Current Asset and it is Debited as it increased. Sales is a Revenue and it is Credited as it increased.

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Example, if ABC Company sells goods to Mr. A (Customer) For Rs. 5000, then in this case, two types of Accounts are involved in this business transactions. 1. Cash and 2. Sales.

As Cash increased by Rs. 5000 so we debited it in the Journal and Sales Credited as it is also increased by Rs. 5000. We record the following Accounting Journal Entry in the Journal of the company.

Cash a/c    5000

                         Sales a/c   5000

(Goods Sold For Cash Rs. 5000)

So, it is all about Cash Sales Journal Entry With Examples.