Sales Explained - BC Bookkeeping Tutorials|dwmbeancounter.com

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Sales Explained

Manager Menu-Tabs > Sales Tabs
Sales Tab records and processes invoices and credit memos billed to customers.

Introduction to Sales
In today's world, the use of credit has become common place. Due to this fact, accounting software has to have the ability to record, report, and manage credit sale transactions. When a business sells goods or services, it either receives cash for the sale, or it accepts a promise from the customer to pay later that creates an accounts receivable entry. This tab focuses on sales made that grant customers credit terms (sale on account).

A sale of product(s) (items) on account is recorded by increasing the general ledger accounts receivable account (debited) and increasing a general ledger sales revenue account (credited). In addition, the cost of goods sold general ledger account is increased (debited) and the the general ledger inventory account is decreased (credited). Also, the individual customer records maintained in Accounts Receivable are updated with the sale (invoice), as well as the detailed individual inventory records maintained for the products.

A sale of a service(s) on account is recorded by increasing the general ledger accounts receivable account (debited) and increasing a general ledger sales revenue account (credited). Also, the individual customer records maintained in Accounts Receivable are updated with the sale (invoice).

Cash sales are recorded using the Receipts Tab and increase the general ledger account cash (debit) and increase a general ledger sales revenue account (credited).

In both instances, costs are also recorded by increasing the cost of goods sold general ledger account (debit) and decreasing the general ledger inventory general ledger account inventory on hand (credit).

Believe it or not, all of this is done automatically.

Manager's Accounting provides billing options for entering invoices for items (products) and services sold to customers on account.
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