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Ledger Posting from Sales Book

Sales book records credit sales of goods only. Cash sales are recorded in the cash book. It is, therefore, necessary that sales account should be prepared to show the overall picture of sales. It should include cash and credit sales. Sales has always a credit balance, so posting in case of sales will be made at the credit side. The persons and parties, whom goods have been sold must have been debited, so posting will be made at their debit side. Sales account will be closed by transfer to trading account but personal accounts will show a balance and closed as ‘By Balance c/d’. The procedure of posting to personal accounts through sales book is explained as under : 

Illustration 4. Prepare a sales book from the following information and post them into concerned accounts: 

2000

Dec. 1              Sold goods on credit to Novelty Book Depot, Chandigarh

200 Copies of Golden Accountancy for Class XII @ $ 80 each

Dec. 5              Sold to Standard Book Depot books worth $. 2,000 for cash

Sold to Adi Book Depol, Chandigarh

200 Copies of Golden Economics for Class XI/ @ $ 50 each

300 Copies of Golden Accountancy for Class XLI @ $ 80 each

                                                            Trade discount allowed @ 20%.

Solution:                                                                                      Sales Book/Sales Journal

Note. Sales to Standard Book Depot are not credit sales, so it will not be shown in the sales book.

Sales Account

Dr.                                                                                                                                           Cr.

Explanation. The total of sales book is transferred to the credit of sales account. Sales book always shows a credit balance, so its posting will be made at the credit side of sales account. Sales book records all credit sales of goods. Cash sales are recorded in the cash book. Both credit sales as per sales book and cash sales as per cash book are posted at the credit side of sales account, which shows total sales of the period. The balance of sales account is transferred to the credit side of trading account.

Novelty Book Depot Account

                                                       Dr.                                                                                                                                           Cr.

Explanation. The account of Novelty Book Depot appears in the sales book which shows a credit balance, so the posting will be made at the debit side of Novelty Book Depot’s Account. Posting in all the accounts appearing in the sales book will be made at the debit side. Parties appearing in sales book are the debtors as the firm, as credit sales were made to them. Debtors as assets have debit balance so the posting will be made at the debit side as ‘To Sales A/c’.

Adi Book Depot Account

                                                       Dr.                                                                                                                                           Cr.

Explanation. Posting will be made at the debit side of Adi Book Depot’s Account because it appears in the sales book as the rule goes. ‘Posting will be made at the debit side, of every account appearing in the sales book’ .Adi Book Depot is the debtor of the firm, so the posting will be made at the debit side of Adi Book Depot. The account will show a debit balance and its balance will be transferred to the next period as opening balance and shown as ‘To Balance b/d’.