Sales day book double entry

Sales day book is a type of subsidiary book. It is used to record transactions from the sales invoice. This is done so as to follow a trail. Therefore ensuring that transactions can be traced. When a business does not use this book, it can supplement it with the general ledger.

1. What's Sales Day book

This is also referred to as the sales journal. It records credit sales transactions from the sales invoice before they are posted to the ledger book. Sales day book is part of the books of account every organization must keep. This is true for both manual bookkeeping and digitalised types. 

Sales journal is used for only credit transactions. This implies that cash sales transactions can't be posted with it. Only the treasury book records cash sales transactions and the data are collected from the copy of receipt given to customers. 

The use of sales day books mostly applies to large businesses. That doesn't mean that small businesses cannot do so. However, small businesses might not use a sales journal. In that case, it uses a general journal that records both sales and purchases transactions. Large organizations will separate this book from others so as to ensure segregation of duties and avoid one staff performing too many tasks which can lead to fraud.

2. Double Entry for Sales Day Book

The double entry for the sales day book is easy. When transactions enter the sales day book it remains there till the end of the week or months depending on the organization. After which it is summed up and posted to the sales account in the general ledger. Next, each debtor's account is debited in the account receivables ledger.

Therefore, the double entry is:

• Dr: Individual debtors accounts in the account receivable ledger
• Cr: Sales Account

3. Importance of Sales Journal 

There are several importance of having a sales day book separately from other books of accounts. One reason is to segregate duties which ensure proper internal control. This can help trace errors and avoid any staff that may attempt to commit fraud. Another importance is that it is used for audit trial during an audit. 

4. Conclusion

In conclusion, a sales day book or sales journal is a book used for credit sales transactions. Do not record a cash sales transaction here. The double entry for this prime book is simply to debit individual debtors accounts and credit the sales account. Lastly, it is an important book because it helps locate errors.