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Sales and Sales Records

Sales and Sales Records

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Published by Phillip Dominguez
Recording Financial Transactions
T1 Chap 6
Recording Financial Transactions
T1 Chap 6

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Categories:Types, Business/Law
Published by: Phillip Dominguez on May 27, 2013
Copyright:Attribution Non-commercial


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Sales and sales records

Chapter 6

qty.1 The Purpose of Sales Invoice: Credit sale • 1. and can be sent before the goods or service is provided. E & OE (Error and Omission excepted) having the right to amend errors. Source Documents for Sales and Sales Records • 1. Customer info.4 Content of a Sales Invoice: Org name. • 1. other copies remain with the seller • 1. order #. total. grand total. or delivery note is sent with goods and invoice is sent separately then. Ex Works (exclosive works) means delivery cost is not included in the invoice and must be paid by customer.1. VAT #. address. terms • 1. tax point/date.3 When are sales Invoices Produced: Along with the goods or with the person providing the service. after the service is provided. registration #. unit price. tax. items.5 Settlement Term: Net 3 days. contact. .2 Copies of Sales Invoice: Main copy to the customer.

controlling. discount. not received. subtotal. Source …….7 copies of credit notes: top copy to the customer others kepped for recordings.8 when are credit notes produce: customer is dissatisfied the goods. VAT. • 1. • 1. VAT amount.6 Purpose of a Credit Note: Reverse of Sales invoice.1. qty. detail. references. invoince number.. item #. It is required for returns faulty and damage. accountign. . • 1. to show the customers no longers owe money for a certaing number of items.9 content of a credit note: Company name and contact info. • 1. regain customers goodwill. correcting error. net paid.

Types of Discount • 2. become regular customer • 2.2 Settlement Discount: persuading the customer to make the payment as soon as possible.2.1 Trading Discoing: is for persuading bulk purchase. .

3. • The business also gives tax when purchasing the goods so the business can the amount of tax paid at the time of purchasing the goods from the tax collected from the customers. General Principles of VAT and Sales Taxes • UK prospective: when the sales of a business reaches a certain value it must register for VAT. . • An International Perspective: VAT is known as Sales Tax the basic is the same business is collector for the tax. The rest of the principles for both approches UK and International. The business collects the tax for the government.

General Principles of VAT …. .1 Basic Calculation of VAT (Sales Tax): when a VAT registered Co. • 3.3..5 • 3.2 VAT and Settlement Discount in the UK: VAT is charged on the amount after the deduction of settlment Discount amount.3 VAT (Sales Tax) requirements VAT invoice: certain information must be on the invoice for the purpose of VAT such as VAT Registration #. Tax Point/Date and Rate of VAT. • 3. It is considered that the customer will accept the settlement discount term. sells anything to its customers it must charge its customers VAT normally 17.

1 Authorizing the preparation of an Invoice: at appropriate time. and make sure all the required information is provided. authorized person should confirm that the goods have been provided. copy of the price quotation sent to the customer.3 Checking and Approving a Completed Invoice: Invoice should be checked against the order. • 4. price list sold by the business. after good is delivered. • 4.2 Finding Information for a Sales Invoice: from Customer Purchase Order. .4. Preparing a Sales Invoice and Credit Note • 4. sales order.

• 4.6 Authorization and Approval of Credit Notes: the credit note should be prepared by signing or initialing the source document containing the detail of sales returns. • 4. Preparing a Sales Invoice …… • 4.4 Obtaining Details for a Credit Note: is similar to the invoice preparation.4.5 VAT (Sales Tax) on Credit Notes: when a credit note is issued the amount of VAT payable is also reduced. some form of goods returned note is needed to record detail and the reason for being returned. Details of the goods returned is important. .

g Ledger A/c • Calculation Checked Credit note authorizaiton . • 5. e. VAT. a small table like is stamped on the invoice or credit note and relevant codes will be written in the table.5. for recording in nominal ledger and also the balance of the customer should be reduced. • 5. 3 Coding Invoices and Credit Notes (Grid Stamp): on commonly used method is grid stump. Customer account etc.2 Coding Required for a Credit Note: to identify the transaction as a sales return or return from a customer.1 Coding required for sales invoice to ensure that: the transaction will be properly recorded in nominal ledger. Methods of Coding Data • 5. the account for sales.

Books of Prime Entry: Day Books • Sales Day Book • Sales Return Day Book • Purchase Day Book • Purchase Return Day Book • Cash Book • Petty Cash Book • Journal .6.

1 What does a Sales Day Book look like? • Sales Ledger Account Number • Settlement Discounts VAT Total Sales Ledger account Customer Name Invoice # Date • 7.3 Entries in an Analized Sales day Book .2 Analysed Sales Day Book: Analized according ragions.7. departments. items etc Ragion 4 Ragion 3 Ragion 2 Ragion 1 20000 VAT Total Sales Ledger account S2175 Custome r Name Forks Ltd Invoice # Date 3500 2350 0 68 15/9/0 5 • 7. Sales Day Book • 7.

8. Sales Returns Day Book • Contents: • Date of Credit note • Credit Note Number • Customer Name • Customer Account Reference Number (Ledger A/C) • Credit Note Total Amount\ • VAT (Sales Tax) • Sub Total .

Sales Day book lists all the credit sales • Step 2: The totals will be then posted to the ledger which becomes part of the Double Entry. . It will be done as following: • Debit: Debitors (receivables) control account • Credit: Sales account • Credit: VAT (Sales Tax) • Memorandum Accounts: These are the accounts used as shortcuts showing any individual how much owe at any time. Function of the Primary Records: Posting Transaction Details to Ledger • Step 1: Periodically totaled daily as the name implies but it can be weekly or monthly depending on the requirements.9.

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