Chapter 14 - Accounting for sales. After completing this chapter, students will be able to: Record the entries for the sale of merchandise for cash or on credit, record sales discounts, record the entries for sales returns and allowances, record sales tax. | CHAPTER FOURTEEN ACCOUNTING FOR SALES 1. Record the entries for the sale of merchandise for cash or on credit. 2. Record sales discounts. 3. Record the entries for sales returns and allowances. 4. Record sales tax. ACCOUNTING FOR SALES Objectives: 14- Recording Sales of Merchandise Sales of merchandise are recorded in a revenue account called Sales. The amount of each sale of merchandise is credit to Sales. The offsetting debit is to Cash or Accounts Receivable. 14- Transaction $760 worth of merchandise was sold for cash. 14- Transaction Analysis Cash is debited $760. Sales is credited $760. 14- Transaction $300 worth of merchandise was sold on credit. 14- Transaction Analysis Debit Accounts Receivable $300. Credit Sales in the amount $300. 14- Recording Amounts Received From Sales of Merchandise on Credit If the cash discount is taken three accounts are affected: Cash, Sales Discount and Account Receivable. 14- Transaction $291 was received for the . | CHAPTER FOURTEEN ACCOUNTING FOR SALES 1. Record the entries for the sale of merchandise for cash or on credit. 2. Record sales discounts. 3. Record the entries for sales returns and allowances. 4. Record sales tax. ACCOUNTING FOR SALES Objectives: 14- Recording Sales of Merchandise Sales of merchandise are recorded in a revenue account called Sales. The amount of each sale of merchandise is credit to Sales. The offsetting debit is to Cash or Accounts Receivable. 14- Transaction $760 worth of merchandise was sold for cash. 14- Transaction Analysis Cash is debited $760. Sales is credited $760. 14- Transaction $300 worth of merchandise was sold on credit. 14- Transaction Analysis Debit Accounts Receivable $300. Credit Sales in the amount $300. 14- Recording Amounts Received From Sales of Merchandise on Credit If the cash discount is taken three accounts are affected: Cash, Sales Discount and Account Receivable. 14- Transaction $291 was received for the payment of an Accounts Receivable. The sales discount is $9, ($300 x ). 14- Transaction Analysis Cash is debited in the amount of $291. Sales Discount is debited in the amount of $9. Accounts receivable is credited in the full amount of $300. 14- Transaction Analysis (continued) 14- Recording Sales Returns and Allowances When a customer returns merchandise or receives an allowance, there is a decrease in revenue. This decrease is recorded by debiting the revenue account, Sales Returns and Allowances, and crediting either Cash or Accounts Receivable. 14- Recording Sales Returns and Allowances (continued) Many businesses provide a cash refund if customers return merchandise or ask for an allowance on goods sold for cash. Sales Returns and Allowances account is debited. Cash is credited. 14- Recording Sales Tax When a sales slip or invoice includes sales tax, the tax is collected from the customer and either Cash or Accounts Receivable is debited. Because the sales tax
