Sales Journal

Sales Journal Definition

Sales Journal is a type of journal that is used to record credit sale transactions of the company and is used for the purpose of 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 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 entity sold the goods. The recording date and Invoice date should be the same.
  • Account Debited: In this column, Name of Customer 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 to the relevant account (Customer Account) daily. Under this column, enter certain no. and the same no. to be allotted to Customer Account for tracking.
  • Account Receivable and Sales: In this column, the Amount to be mentioned which will receive from the customer. Account receivables to be debited and Sale to be credited by the same amount.
  • Cost of goods sold and inventory: In this column, the cost of price of goods sold to be mentioned and the cost of goods sold to be debited and inventory (Stock) Account to be credited by the same amount.

Example of Sales Journal Entry

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

Create a credit sales journal entry for M/s XYZ Company.


Sales Journal Entry Example



  • At the time of recording the credit sale transaction in the sales journal, each such transaction is analyzed in the debit and credit aspect.
  • All credit sale transactions entered supported with invoices.
  • The amount, nature of transactions, customer name, inventory cost, etc. are mentioned in one line.
  • There is no such requirement to mention a long explanation for every transaction.
  • It allows an entity to save time and avoid repetition in the journalizing.
  • All credit sales entries are grouped in one journal.
  • It is base for the finalization of the trial balance.


  • 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, then this will be mismatched between the sales account and account receivable account.
  • It increases the burden of accounting works on entity because an entity can also identify the credit sale transaction from the Account receivable account.
  • Trial Balance, Accounts receivable account, inventory account will not be tallied if there would be a difference or mismatch in this journal.
  • An entity needs to pass the entries in this journal very carefully.
  • It increases the manpower 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 will be mismatched.
  • The entity can pass the sales credit transactions through Journal 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 DebtorsDebtorsA debtor is a person or entity that owes money to the other party in a transaction. The receiver is referred to as the creditor, and the payment terms vary for each transaction based on the terms and conditions agreed upon by the 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 forget to pass any credit sale entry, then it will be a loss for an entity.

Recommended Articles

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

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