Sales journal

Definition

A sales journal is a specialized accounting ledger used to record all credit sales transactions. It helps streamline the process of tracking sales made on credit, ensuring accuracy and efficiency in financial reporting.

5 Must Know Facts For Your Next Test

1. Sales journals only record credit sales, not cash sales.
2. They help reduce the volume of entries in the general ledger by summarizing many individual transactions.
3. Each entry in a sales journal includes details like date, customer name, invoice number, and amount.
4. Sales journals are periodically posted to the accounts receivable subsidiary ledger and the general ledger.
5. The use of special journals, including sales journals, improves accuracy and saves time in bookkeeping.

Review Questions

• What types of transactions are recorded in a sales journal?
• How does a sales journal improve efficiency in accounting?
• What information is typically included in each entry of a sales journal?

Related terms

General Ledger:

A comprehensive ledger containing all of a company's financial accounts.

Accounts Receivable:

Money owed to a company by its customers for goods or services provided on credit.

Special Journals:

Journals used for recording specific types of transactions such as sales, purchases, cash receipts, and cash payments.