What is the journal entry to record a sale on credit?

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Question: What is the journal entry to record a sale on credit?

Options:

Correct Answer: Debit Accounts Receivable, Credit Sales

Solution:

The correct entry is to debit Accounts Receivable and credit Sales to reflect the sale on credit.

What is the journal entry to record a sale on credit?

What is the journal entry to record a sale on credit?

Step 1: Identify that a sale on credit means the customer will pay later, so you need to record the amount they owe.
Step 2: Open your accounting journal to make a new entry for the sale.
Step 3: Write 'Debit Accounts Receivable' for the amount of the sale. This shows that the business expects to receive this money in the future.
Step 4: Write 'Credit Sales' for the same amount. This shows that the business has made a sale and earned revenue.
Step 5: Review the entry to ensure both amounts are the same and correctly reflect the sale on credit.

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