Types of Sales

Types of Sales

Sales is basically is income for the entity and is credited. Sale can be categories into three classes in terms of recording in the books of accounts.

1. Cash Sales

In cash sales full amount of cash is received and the amount received is debited being asset to the entity. A cash sale result in increase in asset in the form of cash and therefore cash is debited and sales are credited due to increase in income.

2. Credit Sale

Credit sale is credit as income being increase in come while the related customer to whom sales is made debited being asset. it is important to note that receivable is asset because it is expected to be converted in cash within twelve month.

3. Partly paid Sales

Sales can be partly paid. it means that some amount of sales is received and balance will be received in future . in such cases the sales account is credited with full amount and cash received and customer is debited for cash received and receivable respectively