WHAT ARE "SALES" IN ACCOUNTS. BASIC ACCOUNTING TERMS.

Transcript

00:00Hello guys, this is Sonia Setia, your accounts and equity tutor.

00:03We were doing accounting terms for class 11th accounts 15 number.

00:07We have sales.

00:08So sale, the word is used by the business.

00:11When the business is dealing in the product,

00:15if you sell them, then for that you use the word sale.

00:18So goods, whenever there will be a sale in the business,

00:20for that you will use the word sales.

00:22So what is goods?

00:24Anything physical and visible items,

00:26which if the business buys, then you use the word purchases.

00:30If it sells, then it will use the word sales.

00:32To sell tangible and intangible assets, fixed assets, etc.

00:36you will not use the word sale.

00:38There can be two types of sales.

00:40Cash sales and credit sales.

00:42What will be the entries?

00:43For cash sale, cash account, debit to sales account.

00:46Cash because my asset is increasing,

00:48that's why I made a debit.

00:50What is sales?

00:50My revenue is increasing, that's why I made a credit.

00:53Credit sales, Sam account, debit to sales account.

00:56I made Sam a debtor.

00:58And sales again is my revenue, that's why I made a credit.