Sales Journal

Updated on April 22, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Sales Journal Definition

A sales Journal is a type of journal used to record credit sale transactions of the company and is used for maintenance and tracking the account receivable and inventory account. It is the Principal book of Credit Sale Transactions, and the information recorded in it depends on the nature and requirement of each business.

Format of Sales Journal comprises six columns:- Date, Account debited, Invoice No., Accounts Receivable- Dr. Sales- Cr. And the cost of goods sold- Dr. Inventory- Cr.

Sales Journal Entry Format

Given below is the format of the sales journal entry.

DateAccount DebitedInvoice NoPRAccounts Receivable – Dr
Sales – Cr.
Cost of Goods Sold – Dr.
Inventory – Cr.
  • Date: This Column is used to mention the date on which the entity sold the goods. The recording date and Invoice date should be the same.
  • Account Debited: In this column, the Customer’s Name is to be recorded who is purchasing the goods on credit only from an entity.
  • Invoice No: Sale invoice No. to be mentioned in this column.
  • PR: PR stands for Post Reference Entries and is recorded daily to the relevant account (Customer Account). Under this column, enter certain no. and the same no. to be allotted to the Customer Account for tracking.
  • Account Receivable and Sales: In this column, the amount to be mentioned will be received from the customer. Account receivables to be debited and sales credited by the same amount.
  • Cost of goods sold and inventory: In this column, the cost price of goods sold is mentioned, the cost of goods sold to be debited, and the inventory (Stock) Account to be credited by the same amount.

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Example of Sales Journal Entry

M/s XYZ Company sold the below goods on 01st April 2020.

Create a credit sales journal entryCreate A Credit Sales Journal EntrySales credit journal entry refers to the journal entry recorded by the company in its sales journal when the company makes any sale of the inventory to the third party on credit. In this case, the debtors' account or account receivable account is debited with the corresponding credit to the sales account.read more for M/s XYZ Company.


Example of Sales Journal




  • An entity should pass correct entries in the sales journal for accuracy of trial balance; if the entity passes any wrong credit sales entry in it, this will be mismatched between the sales account and account receivable account.
  • It increases the burden of accounting work on an entity because an entity can also identify the credit sale transaction from the Account receivable account.
  • Trial Balance, Accounts receivable account, and inventory account will not be tallied if there is a difference or mismatch in this journal.
  • An entity needs to pass the entries in this journal very carefully.
  • It increases the workforce cost of the entity.


  • Closing Balance of Account Receivable Account and Credit Sale Account should be matched in this journal; otherwise, there will not be beneficial.
  • The entity should have a separate human resource for doing credit sales entries in this journal.
  • Trial Balance can’t be matched if the Sales Journal is mismatched.
  • The entity can pass the sales credit transactions through journals also.
  • It increases the accounting burden on the entity.

Important Points


An entity should maintain Sales Journal in the prescribed format by generally accepted accounting principles for an accounting of credit sale transactions so that Debtors’DebtorsA debtor is a borrower who is liable to pay a certain sum to a credit supplier such as a bank, credit card company or goods supplier. The borrower could be an individual like a home loan seeker or a corporate body borrowing funds for business expansion. read more records and credit sales records can be managed.

Its usage is overall beneficial for an entity because it helps for credit sales amount losses; if the company does not maintain a sales journal and forgets to pass any credit sale entry, it will be a loss.

Recommended Articles

This article has guided what Sales Journal is and its definition. Here we discuss the credit sales journal entry format with the help of examples, advantages, disadvantages, and limitations. You can learn more about accounting from the following articles –

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