HomeIndustriesFinanceDefinition of Sales Journal and its Various Types

Definition of Sales Journal and its Various Types

All retail companies must have a primary business that makes buying and selling on an ongoing basis. But, of course, not we can do all buying and selling transactions in cash. Therefore, businesses need to use sales and purchases journals. This unique shopping journal and sales journal makes it easy for us to enter and create financial reports. So it is necessary to record carefully, accurately, correctly and adequately. Check out the following article for a complete explanation.

Sales Journal

Definition of Sales Journal

A sales journal is a particular journal for an accounting cycle whose job is to record sales transactions. In addition, we can use special journals to record and post to accounts for computerization. Usually, the information is stored in the sales journal for each transaction, including; (1) Transaction date, (2) Account number, (3) Customer name, (4) Invoice number Sales amount (debit of accounts receivable and credit of sales account).

In general, only accounts receivable are recorded in the sales journal. This means that cash transactions are not recorded, and cash transactions will be entered into the cash receipts journal. However, in reality, many may still use the journal account to record cash sales. Therefore, you can browse the journals to view the balances recorded in the general ledger. In addition, you can use the invoice number listed to access a copy of the invoice.

The more and more complicated the transactions, so the company needs a good recording system. This recording system is known as the accounting system. The system continues to roll over time to form a cycle called the accounting cycle.

Types of Sales Journals

There are general 4 (four) types of sales journals, and their explanations are as follows:

1. Cash


Of course, the Company can sell goods in cash or on credit. Cash sales usually go to the cash register and will get a record in the accounts. 

The following is an illustrative example of a perpetual sales journal:

Therefore, we can assume that on November 11, 2021, HashMicro sells goods for $ 3,000,000.

This sales transaction can be record as follows:

(Debit) Cash = $ 3,000,000

(Credit) Sales = $ 3,000,000

We must also record the cost of goods sold in the perpetual inventory system and the inventory reduction. With this, the inventory account shows the amount of inventory that has not been sold.

Assume that the cost of goods sold on November 12, 2021, is $1,000,000.

The journal to record the cost of goods sold and the inventory reduction is as follows:

(Debit) Cost of Goods Sold = $ 1,000,000

(Credit) Inventory = $ 1,000,000

Sales using credit cards will be processed by the clearing agency that connects the credit card issuing bank. For example, BCA Credit Cards, Bank Mandiri.

The bank will later transfer the cash from the sale to the retailer’s bank account. So, if the buyer pays in cash or uses a credit card to pay for his purchases, the sale will get a record.

The processing load that the clearing agency or credit card issuing bank pays is about 2-3% of the sales transaction figure.

Here’s how to record credit card expenses periodically:

(Debit) Credit card expenses = $ 60,000

(Credit) Cash = $ 60,000

2. Credit

sales journal

A sales journal is a journal entry whose function is to record types of credit sales transactions. The seller typically records the sale as a debit to Accounts Receivable or Accounts Receivable and a credit account. The risk of selling on credit is in the notes receivable and notes payable journals.

Pay attention to the perpetual method of recording credit sales journals below:

Sales journals on credit for $ 500,000 and cost of goods sold $ 250,000 for HashMicro are as follows:

(Debit) Accounts Receivable = $ 500,000

(Credit) Sales = $ 500,000

(Debit) Cost of Goods Sold = $ 250,000

(Credit) Inventory = $ 250,000

3. Sales discount journal

Terms in a sale are usually stated in the sales invoice sent to the buyer. An invoice means a document that a business sends to a buyer. The terms in a payment agreed upon by the buyer and the seller are called credit terms. If payment occurs when the goods are delivered, the conditions are cash or net cash.

On the other hand, if the buyer can get time waivers to pay, it is called the credit period. The credit period usually starts from the date of the sale transaction stated on the invoice. For example, if the payment is due after the invoice date, such as 30 days, the condition is 30 net days, written n/30.

While the payment is due at the end of the same month as the month of sale, the terms are written as n/eom (end-of-month). To encourage the buyer to pay before the due date, the seller usually offers a discount. For example, a seller can offer a 2% discount if the buyer pays within ten days of the invoice date.

However, if the buyer does not take the discount, the price stated on the invoice will be due in 30 days. The writing of this condition is as 2/10. n/30 and read as 2% discount if paid in 10 days. Therefore, the net amount is due in 30 days. The discount that the buyer takes for paying early is stored as a sales discount by the seller.

Usually, the seller records the sales discount in a separate account. Therefore, a sales discount account is a contra account against sales.

Consider the following illustration of a sales journal with a discount and VAT:

Say cash the seller is receiving within the discount period (10 days) from a credit sale of $1,500,000 and VAT of 10%.

Then the sales transaction journalis like this:

1. (Debit) Cash = $ 1,320,000

2. (Debit) VAT = $ 150,000

3. (Debit) Sales Discount =$ 30,000

4. (Credit) Accounts Receivable = $ 1,500,000

4. Return journal and sales discounts.

An item can be returned to the seller, which is a sales return. In addition, for reasons of damaged goods, defects or other reasons, the seller can reduce the price of the goods / provide sales discounts (sales allowance).

Suppose sales returns or discounts occur on credit. The seller usually makes a credit memo or credit memorandum for the buyer who makes the return. This memo shows the amount and reason for the seller’s credit in the accounts receivable account, which accounts receivable in the event of a credit sale means that the amount gets a reduce.

Such as sales discounts, sales returns, and discounts can reduce revenue because they can add to the postage of selling goods and other expenses. Because inventory is constantly getting an update, the seller adds the cost of the items returns to the inventory account. In addition, the seller must credit the cost of the goods that the customer returns to the goods sold account because this account is a debit when the initial sale is recorded.


sales journal

That is a brief discussion of the sales journal and its types. The sales journal is essential for a business because of the ongoing buying and selling. The recording of cash flows also needs to be used by various existing business people. 

If your business doesn’t have accounting software, don’t hesitate to get in touch with us. HashMicro provides software that can help manage your business finances. Click here to contact us.

Interest in getting savvy tips for improving your business efficiency?

Afkar Azhfar
Afkar Azhfar
Full-Time Internship Content Writer at HashMicro. Always explore new things to develop content writing skills.


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