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

Practice Questions

Q1
What is the journal entry to record a sale on credit?
  1. Debit Cash, Credit Sales
  2. Debit Accounts Receivable, Credit Sales
  3. Debit Sales, Credit Accounts Receivable
  4. Debit Sales, Credit Cash

Questions & Step-by-Step Solutions

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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