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Sales Journal

The general journal is the all-purpose journal that all transactions are recorded in. Since all transactions are recorded in the general journal, it can be extremely large and make finding information about specific transactions difficult. That is why the general journal is divided up into smaller journals like the sales journal, cash receipts journal, and purchases journal. Each of these journals record specific transactions.

The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales. Notice that only credit sales of inventory and merchandise items are recorded in the sales journal. Cash sales of inventory are recorded in the cash receipts journal. Both cash and credit sales of non-inventory or merchandise are recorded in the general journal.

The sales journal typically has six columns. A column for the transaction date, account name or customer name, invoice number, posting check box, accounts receivable amount, and cost of goods sold amount. Notice that there isn't a column for cash. Since all sales recorded in the sales journal are paid on credit, there is no need for a cash column.

Here is an example sales journal. Assume that Big Guitars, Inc. sold a guitar to a Josh Roberts for $1,500 on January 1st. The cost of the guitar was $700. Big Guitars, Inc. would record the journal entry for the transaction in its general ledger like this:

Sales Journal Entry Example

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After this sale, the Big Guitars, Inc. sales journal would look like this:

Sales Journal Example

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