Accounts Receivable VS Sales

We already studied about Accounts Receivable and Sales in our previous articles, but here we are concerned with the difference between Accounts Receivable And Sales (Accounts Receivable VS Sales).

1. Nature of Accounts:

The main difference between Accounts Receivable And Sales is the Nature of Accounts. Accounts Receivable are the debts due that are payable by the customer to company within the specified Accounting Period, usually within one Year. Accounts Receivable are Current Assets And transferred to Balance Sheet. While Sales is A Revenue and it is the price of goods sold or services rendered by company to its customers. Sales is transferred to Income Statement or Profit And Loss Statement to calculate the profits on goods sold or services rendered by the company to its customers.

You may also be interested in “Difference Between Income Statement And Balance Sheet”

2. Accounting Journal Entry

For Accounts Receivable, following Accounting Journal Entry is Passed in the Journal of Company, when goods or services sold on Credit or On Account:

Mr. A a/c (Account Receivable)

        Sales a/c

In case of Sales, there are Cash And Credit Sales Business Transactions. Following Below Accounting Journal Entries are passed in the book of Company

In case of Cash Sales:

Cash a/c


                  Sales a/c

In this Accounting Journal Entry, No Account Receivable is Created as payment is made by customer on Cash Basis, so it is a Cash Sales Business Transaction.

In case of Credit Sales:

Mr. A (AR)


                   Sales a/c

From the above Accounting Journal Entry, Account Receivable is Created as Payment is made on Credit Basis, so it is a Credit Sales Business Transaction.

3. Interdependence

At the time of making Credit Sales, Account Receivable is also Created that is the name of Customer recorded in the Book of Company for the goods sold or services rendered on Credit Basis by company to its customers. So, Accounts Receivable And Credit Sales depends upon each other. When Credit Sales is created, Accounts Receivable is also created who is the customer of the company and he / she will make payment on later date within the specified accounting period.

It is all about the difference between Accounts Receivable And Sales.