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Sales Ledger

The sales ledger/debtors ledger is essential where most, if not all, of the sales of a business are made on credit rather than for immediate cash. The sales ledger is a separate ledger to specifically maintain a list of all the customers’ personal accounts/trade debtor accounts for the credit sale transactions. When customers pay for the goods immediately by cash, they are not included in the sales ledger. They do not owe anything so there isn’t the need to keep an account for each of them.

Whenever a credit sale has taken place, the seller prepares and sends an invoice to the customer. The invoice known as sales invoice shows details and prices of the goods sold. The seller keeps at least a copy of the sales invoice for recording in the sales journal. Once the credit sales have been entered in the sales journal from the sales invoices, they are ready for posting to the sales ledger. In posting, the following are done:

  • The credit sales as entered in the sales ledger are debited one by one to the respective customers' accounts in the sales ledger.
  • At the end of each period, usually a month the total of the credit sales in the sales journal is credited to the sales account in the general ledger.

Entries which go into a debtor’s account in the sales ledger: it is debited with sales and credited with cash received, discounts allowed and returns inwards as follow:


Sales Ledger

Chipmunk & Co

Date Particulars Folio Amount Date Particulars Folio Amount
20XX $ 20XX $
Jan 01 Balance b/d 350 Jan 03 Bank CB04 250
Jan 13 Sales SJ23 220 Jan 18 Cash CB18 100
Jan 21 Sales SJ23 400 Jan 21 Discounts Allowed GL15 20
Jan 23 Returns Inwards RI12 110
Jan 31 Balance c/d 490
970 970

Balance c/d (balance carried down) is the amount owed by the customer. This amount is inserted into the account to make both the debit and credit sides equal in totals. The ‘balance c/d’ becomes ‘balance b/d’ (balance brought down) when it is copied on to the opposite side on the line immediately below the two totals to be the opening balance for the next period.


A sales journal for posting

Date

Invoice

No.

Particulars

Folio

No.

Invoiced

Amount

20XX
Jul 01
"  11
"  22
"  30


00111
00112
00113
00114





Appleby Picking & Co
Bear Hugging Trading
Candy Many Store
David Goliath



SL10*
SL12
SL16
SL21


$
400
200
500
100




GL35**

1,200

*SL10 = Sales Ledger Page 10 / **General Ledger Page 35


Postings from Sales Journal:

General Ledger

Sales Account





20XX
Jul. 31


Per Sales Book


SB45"

$
1,200

"SB45 = Sales Book Page 45


Sales Ledger

Appleby Picking & Co

20XX
Jul. 01


Sales


SB45

$
400







Bear Hugging Trading

20XX
Jul. 11


Sales


SB45

$
200







Candy Many Store

20XX
Jul. 22


To Sales


SB45

$
500







David Goliath

20XX
Jul. 30


To Sales


SB45

$
100







 


Last Updated (Friday, 03 September 2010 15:35)