Simple Cash Sales

Cash sales are simpler to record than credit sales in two very important ways. First, you don't have to bother recording the transaction in a customer's account on top of the general account. Second, there's no second step to the transaction; with credit sales, you have a second transaction to record when the cash is finally received. In addition to that, it doesn't matter whether you use the accrual method or the cash method: when you have a straight cash transaction, you record it right then and there. Remember, cash sales include every sale in which the customer pays right away, even if it's by check or credit card.

Cash sales are typically recorded in one giant journal entry at the end of each day. The special journal for these transactions is called the cash receipts journal. A standard entry involves a debit to cash and a credit to sales. Other accounts may factor in, though, such as sales tax payable. When those other accounts are used more often than not, you can include special columns for them in your cash receipts journal.

When you get to the end of your journal page, foot all the columns; then make sure your combined debit columns total equals your combined credit column totals to ensure that your journal remains in balance. Once you know your journal page is in balance, you can post the column totals to the appropriate general ledger accounts. If your journal includes a miscellaneous column, though, you have to post the individual line items to the various accounts in use.

To keep your bookkeeping life as simple as possible, make sure your deposit slips match your journal entries exactly. If you record $862 in cash sales on Monday, deposit $862 on Tuesday. That way you have an easily traced trail from your sales to your bank deposits, which can come in handy should any questions arise. When you have other items to deposit, such as customer payments on account or vendor rebates, you can use separate deposit slips or simply indicate the alternate source on your cash sales deposit slip.

The easiest way to keep track of your cash sales is to deposit every penny you receive, whether the customer pays with cash, check, or credit card. This way, your revenues equal your deposits, which simplifies record-keeping. Don't use cash from sales to pay for expenses before the money ever hits the bank; that can cause unnecessary confusion when you're trying to write up your journal entries.

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