Sales Day Book or Sales Journal and Its Uses

Sales journal is a book of original entry used to record all goods sold and services rendered on credit to a third party in the order in which they occurred irrespective of the amount involved.

The sales day book or sales journal is not an account because it does not have a debit or credit side, and neither can cash sales nor other cash and bank transactions be recorded in it.

The value of credit sales which are first recorded in the sales journal will be transferred individually to the respective customer’s account in the ledger, while the total of all credit sales for the period as recorded in the sales day book is transferred to the credit side of the sales account in the ledger.

The process of transferring from the day books to the ledger is called posting. This is achieved for all credit sales by debiting the customer’s (debtors) account with individual customer amount and crediting the seller’s (sales) account.

Please note that for the entries with “Same as Joshua,” you should replace the unit price, total, discount, and net amount with the corresponding values from the Joshua transaction. Also, make sure to calculate and fill in the total sales amount for the month in the provided space.

Sales and Discounts

The marketing and sales of goods and services have become more competitive over the years that sellers of goods and those who render services have developed a way of attracting more customers, increase their sales and ensure regular payment from credit customers or debtors through the use of discount.


Discount can be defined as an inducement given to customers to enable them buy in large quantity, obtain profit margin price when goods are sold and/or for prompt payment by debtors. There are different types of discounts as explained below.

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Trade Discount

Trade discount is a reduction in price given to a customer who buys for re-sale in large quantity. The purpose is to enable the customer achieve a profit margin when the goods are sold.

Cash Discount

This is an inducement given to debtors (credit customers) for paying their debt on time or promptly within the specified time frame or period. It means that, a credit customer can enjoy both the trade discount and cash discount provided the terms for the discounts as specified by the seller are met.

Quantity Discount

Quantity discount is a price reduction given to a customer who buys in large quantity for consumption and not for re-sale.

Relationship between Sales and Discounts

The relationship that exists between sales and discounts depend on the nature of the transaction, either credit sales or cash sales. The relationships are explained below.

Credit sales

The discount available to those who buy on credit or the customer (Debtors) at point of sale is trade discount. The trade discount can be stated as a percentage of the sales price or a uniform amount that varies with sales value.

Where trade discount is given on credit sales, the discount value will be deducted from the sales value in the invoice. The customer will owe the seller the sales value less the trade discount. It is the net price that will be recorded in the customer’s account.

Cash sales

As a matter of clarity, trade discount is not given on cash sales; hence, trade discount will be treated with credit sales as explained above. For cash sales, a customer could get cash discount and/or quantity discount.

Quantity discount would have been deducted from the invoice leaving the net value which the customer is expected to pay immediately or at a given time. Cash discount can only be recognized when the customer settles his outstanding invoices.

Hence, cash discount is treated in accounting records when payment is received from the customer (Debtor).

DateParticularsQuantityUnit Price (N)Total (N)DiscountNet Amount (N)
4-6-2014Jalingo – 4 cartons Cray fish41,2505,0005,000
4-6-2014Gboko – 7 cartons shrimps74,10028,70028,700
4-6-2014Gboko – 2 cartons Cray fish (10% trade discount)21,2452,4902492,241
12-6-2014Ajayi – 15 crates white egg (5% discount)1588013,20066012,540
12-6-2014Ajayi – 3½ packets prawns (5% discount)7,20025,2001,26023,940
16-6-2014Debo – 6 cartons Cray fish (15% discount)67,44044,6406,69637,944
16-6-2014Debo – 2 packets prawns (7,225 per packet)27,22514,45014,450
16-6-2014Debo – 5 cartons shrimps (4,150 per carton)54,15020,75020,750
25-6-2014Ijeoma – 1 carton Cray fish (10% trade discount)1Same as JoshuaSame as JoshuaSame as JoshuaSame as Joshua
25-6-2014Ijeoma – 1 packet prawn (Same as Joshua)1Same as JoshuaSame as JoshuaSame as JoshuaSame as Joshua
25-6-2014Ijeoma – 1 crate white egg (Same as Joshua)1Same as JoshuaSame as JoshuaSame as JoshuaSame as Joshua
25-6-2014Ijeoma – 1 carton shrimps (Same as Joshua)1Same as JoshuaSame as JoshuaSame as JoshuaSame as Joshua

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