Accounting for Sales Revenue
In this lesson, we will learn how to calculate sales revenue with trade discount, record them in the journal and ledger accounts, and to close the sales revenue account.
Related Lessons:
Calculating Sales Revenue
Sales revenue are income earned by a trading business through the selling of its products.
If trade discount is given for the sales, trade discount is minus from the original selling price to determine the net sales revenue. Only the net sales revenue amount is recorded in the business books.
Recording Sales Revenue
Sale revenue is recorded in the journal as follows:
1. To record credit sales
Dr Trade receivables
Cr Sales revenue
2. To record cash sales
Dr Cash in hand
Cr Sales revenue
3. To record cash sales banked in
Dr Cash at bank
Cr Sales revenue
Closing Sales Revenue Account
To close the sales revenue account, at the end of the month, the balances in the sales revenue account are transferred to the income summary account, and we start the following month fresh.
Dr Sales revenue
Cr Income summary