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Sales Day Book in Accounting

A business requires to record the key details for each individual credit sale of a customer. The sales day book is a ledger that is manually maintained and includes the following information:

  • Customer name

  • Invoice number

  • Invoice date

  • Invoice amount

All this information is added generally to a sales day book at the end of each business transaction, the recordings are done based on the company's copies of all customer invoices issued. The next step is to transfer the daily total of the sales that are listed in the sales day book into the sales ledger. Hence, the most detailed records of the credit sales are in the sales day book, and the daily totals of credit sales appears in the sales ledger.

The system of recording in sales day books is recorded in manual accounting systems. These recordings are absent in computerized accounting systems, as accounting software automatically stores and aggregates all the customer invoices prepared through the computer system only.


Sales Day Book and Sales Ledger

The Sales day book is also known as - Sales Book, Sales Journal, Sold Book etc. This is a type of subsidiary book, which is a book of original entry. Sales Day Book is a manually maintained account, with the purpose of recording all the credit sales of the business in one distinct place. All the credit sales of the firm are recorded in the sales day book. Here, no cash sales will be recorded, the cash sales are recorded in the cash book. While, only the sale of goods will be recorded here. The firm selling any asset or investment on credit, the transactions are recorded in the journal proper and not in the sales book.

A sales ledger is a detailed and accurate breakdown of all the sales that have taken place, this does not matter whether or not the same has been paid. Often the sales ledger will contain all the detailed information about the sale itself, including the invoice, amount of tax, and credit notes that are applied.

Items as these are recorded in the sales ledger are then transferred to the appropriate general ledger account at different intervals, this is done according to the nature of the business. The separation will help to keep the general ledger from getting weighed down with too many different accounts, while also maintaining the detailed records which might be required for auditing or reporting function. In the accounting software, the sales ledger is often simplified into several other reports, these can be viewed on the requirement of the concern.


Uses of Sales Day Book 

The sales journal also known as the sales day-book, is a type of special journal which are used 

  • To record the credit sales of the transaction.

  • The sales journal is a chronological list of the sales invoices. This is used to save the time by avoiding the cluttering of the general ledger with unnecessary detail.

  • This also allows for segregation of duties.

This should be noted that the sales journal includes the credit sales to the customers for merchandise, including cash sales, sale returns, or credit sales for non-merchandise items like the fixed assets. While the cash sales are included in another special journal known as the cash receipts journal, sale returns are included in the sale returns journal.

The use of the sales journal can be vividly detailed into a three-step process:

  • Information is recorded in the sales journal from the copy of sales invoices sent to the customers.

  • The journal line items are here used to update the accounts receivable ledger for each of the customers.

  • Then the journal totals are used to update each general ledger.

This is to be noted that, if the business maintains an accounts receivable ledger account in the general ledger, then the step 3 (above) is the part of the double entry book-keeping posting.

FAQ (Frequently Asked Questions)

1. What Do You Mean by Ledger?

Ans. A ledger is a book which contains accounts where classified and summarized information from the journals is posted as the debits and credits. The ledger contains the information which is required to be prepared by the financial statements. It also includes accounts for a business’s assets, liabilities, owners' equity, revenues and other expenses.

2. What is Invoice?

Ans. An invoice, commonly known as the bill or tab is a commercial document which is issued by a seller to a buyer, after a sale transaction. The invoice indicates the products, quantities, and agreed prices for the products or services that the seller had provided the buyer. The terms of payment are usually stated on the invoice. 

3. What is Meant by the Subsidiary Book?

Ans. Subsidiary Books are called the books of ‘Original Entry’. They are also known as the Day Book or the special journals. We record the transactions of similar nature in a Subsidiary Books. The subsidiary books are helpful in overcoming the limitations of journal book or the journal entries.

4. What is a Double Entry Book-Keeping System?

Ans. Double-entry bookkeeping is an accounting system where the transaction is recorded in two accounts: a debit is assigned to one account and a credit to another account.

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