Sales Ledger Flashcards
What is a sales ledger?
Records all sales regardless of whether you receive the payment
How does sales ledger account for accounts receivable?
Ensure that the payments you receive correspond with the amounts on the invoices
1st step in accounts receivable?
Create a credit application process
What are the terms and conditions of your average sales?
2nd step in accounts receivable?
Customers requested sale should receive an invoice
3rd step in accounts receivable?
Establish payment terms and due dates
A business must clearly define when invoices are due, in order to be paid on time. (e.g. net 30 terms)
4th step in accounts receivable?
Monitoring and Reporting
The “age” is how many days have transpired since the invoice date.
5th step in accounts receivable?
Recording AR activity
Record payments coming in, when they are received, the outstanding debt, and invoices that remain unpaid.
What is a credit note?
Document used to cancel all or some parts of a sales invoice
What is a sales quote?
A document that provides an exact price for a job. It is issued before the delivery of goods/services
What is a sales invoice?
A payment demand issued after the sale and gives customers a method to pay for services/products received
Credit note journal entry
Debit:
Sales
VAT
Credit:
Accounts receivable
Sales invoice journal entry
Debit:
Accounts receivable
Credit:
Sales
VAT
