Sales/Purchase Account

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
:-o
Hello,

I am a little confused with the sales/purchase account. Take sales - I know that the net total of sales is taken from the sales day book and posted to this account as a credit. What debits are posted to this account?

Sorry if this sounds stupid.

Moe

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Sales/Purchase Account

    There are no debits to this account.

    This is an accumulation of Net Sales, over the history of the company, or until year-end.

    There should only be credit entries in Sales Account.

    For the Purchase account, the reverse holds true.

    Payments to, and from 'you', are dealt with in the Sales/Purchase Control Accounts and the Purchase/Sales Ledger acounts for Debtors and Creditors (Gross values).

    Does that help? :D
    Nigel

    Last Week Before Exams
    https://www.aat.org.uk/forums/posts/list/13816.page


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Sales/Purchase Account

    :)

    Thanks Nigel - it does.

    I just thought i was missing something.

    Regards
    Moe
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Sales/Purchase Account

    Just to point out - there can be debits posted to the Sales account.

    The sales returns day book can be combined with the sales day book, but some businesses keep it seperately and the total of the returns account would be posted to the Sales account as a debit.

    If the business sells something which is then returned, the double entry to record this is:

    DR Sales
    CR Bank

    But overall the balance of the Sales account will be a credit.

    Same with purchases - overall balance is a debit but credits can be posted to the Purchases a/c if the business buys something and then returns it:

    DR Bank
    CR Purchases

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Sales/Purchase Account

    :)

    Thank You

Categories

Privacy Policy