When you sell goods for cash, you need to record the transaction in your accounting records through a journal entry. This entry consists of at least two accounts to maintain the double-entry accounting system. In this case, the accounts involved are Cash and Sales Revenue. Here’s the journal entry for selling goods for cash:
- Debit Cash (Asset): This account increases because you received cash from the sale of goods.
- Credit Sales Revenue (Revenue): This account increases as you earned revenue from the sale.
Here’s a journal entry in table form for selling goods for cash, along with an example using specific numbers.
Journal Entry:
| Date | Account Title | Debit | Credit |
|---|---|---|---|
| YYYY/MM/DD | Cash | XXXX | |
| YYYY/MM/DD | Sales Revenue | XXXX |
Example:
Let’s say you sold goods for $1,000 cash on May 10, 2023. The journal entry would be as follows:
| Date | Account Title | Debit | Credit |
|---|---|---|---|
| 2023/05/10 | Cash | 1,000 | |
| 2023/05/10 | Sales Revenue | 1,000 |
In this example, you would debit the Cash account for $1,000, indicating an increase in your cash. You would also credit the Sales Revenue account for $1,000, reflecting the revenue earned from the sale of goods.
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