Journal Entry for Cash Sales

When goods/services are sold for cash, the transactions are known as Cash Sales, i.e., when the customer pays in terms of cash in exchange for goods and services, cash sales occur. Cash sales journal entry is passed to show the sales transactions that have been settled in cash. There are mainly two types of cash sales:

• Sale of goods in cash
• Sale of an asset for cash

Cash Sales Journal Entry

Journal Entry:

1. For the Sale of Goods in Cash: Sale of goods (in cash) is an income, so the balance of the cash account (debit balance) increases, and the balance of the sales account (credit balance) decreases.

2. For the Sale of an Asset for Cash – For the sale of an asset in cash, the balance of the cash account (debit balance) increases due to the inflow of cash, and the balance of the asset account will decrease due to the outflow of the asset.

Example 1:

Goods sold in cash for ₹10,000. Record the necessary journal entry.

Solution:

Example 2:

Cash received in exchange for the sale of furniture amounted to ₹50,000. Record the necessary journal entry.

Solution: