LESSON 10-1
Journalizing Sales on Account Using a Sales Journal
2 Major Activities of a Merchandising Business
1. Purchases
2. Sales of merchandise
 Customer – a person or business to whom
merchandise is sold.
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SALES TAX
page 270
 Laws of most states and some cities require a tax be
collected from customers for each sale made.
 Sales Tax – a tax on a sale of merchandise or services.
 Usually stated as a percentage.
 Businesses must file reports and pay the amount of
sales tax collected.
 Businesses collecting sales tax need accurate records
of:
1. Total sales
2. Total sales tax collected
CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 10-1
SALES TAX CONTINUED
 Sales tax collected is a business liability until paid to the
government agency.
Sales Tax Payable
Normal credit balance
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SALES OF MERCHANDISE ON ACCOUNT page 271
 A sale of merchandise may be:
1. On account
2. For cash
 The revenue from a sale should be recorded at the time of
sale not on the date cash is received.
 Sale on account (charge sale) – a sale for which cash will
be received at a later date.
 Use Accounts Receivable
 Is an asset
 Normal debit balance
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LESSON 10-1
5
SALES JOURNAL
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 Sales journal – is a special journal used to record only
sales of merchandise.
 Special amount columns are:
 Accounts Receivable Debit
 Sales Credit
 Sales Tax Payable Credit
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LESSON 10-1
6
SALES INVOICE
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 Invoice – is a form describing the goods or
services sold, the quantity, and the price.
 Is prepared when merchandise is sold on account.
 Sales invoice is the source document for recording a
sale on account. Also know as a sales ticket or sales
slip.
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LESSON 10-1
SALES INVOICE CONTINUED
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SALE ON ACCOUNT
page 273
November 3. Sold merchandise on account to Village Crafts, $540.00,
plus sales tax, $32.40; total, $572.40. Sales Invoice No. 76.
1
2
3
4
5
6
1. Write the date.
2. Write the customer name.
3. Write the sales invoice number.
4. Write the total amount owed by the customer.
5. Write the sales amount.
6. Write the sales tax amount.
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LESSON 10-1
9
TOTALING, PROVING, AND RULING A
SALES JOURNAL
CENTURY 21 ACCOUNTING © Thomson/South-Western
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LESSON 10-1