Is Sales A Permanent Account Or A Temporary Account
Sales Is A Temporary Account In Accounting Sales is a Temporary Account but not a Permanent Account as sales is closed to Income Summary Account at the end of the accounting period. Eventhough the sales account is added to owner’s equity account when solving an accounting equation yet it is not considered as a permanent account as it is the result of operating activities of the owner of the business, so it is added to owner’s equity in case of accounting equation. Firstly, Sales T account is prepared and then it is recorded in Income Statement. At the end of the accounting period, it is closed to income summary account by debited it and credited income summary account. Sales account has not ending balance so it is not transferred neither to Post-Closing Trial Balance nor to Balance Sheet .