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Accountancy > Recording Transactions > Sales (Journal) Book and Sales Return Book
Recording Transactions

Sales (Journal) Book and Sales Return Book

Every now and then, a business makes various sales in order to gain some form of revenue. These sales validate the purpose of a business. They provide a lifeline to a business and give them a reason to exist. Without sales, a business would find its existence redundant. Let us study in detail about the preparation of a sales book and a sales return book.

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Sales Book

A Sales book is a record of all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales. The amount entered in the sales book is on behalf of invoices supplied to purchasers. A Sales book is also called Sales Journal or Sales Day Book.

For example, the following entries of sales appear in the books of ABC Ltd.

Jan 7 – Sold 10 Keyboards to A & Co. for 300 each.

Jan 24 – Sold 5 headphones to X & Co. for 200 each.

Sales book of ABC ltd will appear as follows:

Sales Book

Date Particulars LF Amount
7 Jan A & co. 3000
24 Jan X & co. 1000
4000

A credit sales will be recorded by passing the following journal entry:

Debtors A/c – Dr.

To sales A/c

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Sales Return Book

Sales Return Book

When a business sends back the ordered goods to a vendor, it is recorded in the sales return book. At times the buyer may return goods due to the poor quality of the product, an inaccurate quantity of the product, untimely delivery or other such reasons.

It is also called returns inward and an appropriate sales return or a returns inward book is maintained for recording entries related to the same. All returns are primarily recorded in the sales return book unless the returns are not that frequent, in which case they are recorded in the journal.

Entries for sales returns are recorded by passing the following journal entry:

Sales return A/c – Dr.

To Debtors A/c

After the sales return book is properly updated and all transactions are entered into the book, the total of the items is transferred to the ledger in an account called the Sales returns account. At the end of the day, each entry is posted to the credit side of the appropriate individual’s account in the Debtors’ ledger as this helps the account to remain up to date.

Solved Question for You

Q: Show how the following events will appear in the ledger accounts.

Total sales returns made at the end of a month are for 50,000, including returns made by A for 30,000 and returns made by B for 20,000.

Answer –

Sales Returns A/c

Date Particulars Amount Date Particulars Amount
To sundry debtors 50000

Sundry Debtors A/c

Date Particulars Amount Date Particulars Amount
By sales return 50000

A’s Account

Date particulars Amount                    Date Particulars amount
By sales return 30000

B’s Account

Date                     Particulars Amount Date Particulars Amount
By sales return 20000

 

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