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A sale is a transfer of property for money or credit. [2] In double-entry bookkeeping, a sale of merchandise is recorded in the general journal as a debit to cash or accounts receivable and a credit to the sales account. [3] The amount recorded is the actual monetary value of the transaction, not the list price of the merchandise.
When normal operations are discontinued, adjusting and closing entries are made. Thus, only the assets, liabilities and partners' equity accounts remain open. If non-cash assets are sold for more than their book value, a gain on the sale is recognized. The gain is allocated to the partners' capital accounts according to the partnership agreement.
For example, when an entity sells a machine it manufactured for sale, it recognizes the amount received as revenue and the cost of the machine cost of sales (an expense). If, on the other hand, an entity sells a machine previously used in production, it recognizes a gain if it receives more for the machine than its depreciated value ...
A journal entry is the act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company's debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit. The total of the debits must equal the ...
Folio Number: Every page of a journal is numbered. This number is known as a folio number. [5] The folio number is used as a cross reference between the journal and the ledger accounts. The use of folio numbers makes it easy to refer back from the ledger account to the journal entry or forward from the journal entry to the ledger account.
Capital gains tax is a levy imposed by the IRS on the profits made from selling an investment or asset, including real estate. Primary residences have different capital gains guidelines than ...
The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales. Notice that only credit sales of inventory and merchandise items are recorded in the sales journal. Cash sales of inventory are recorded in the cash receipts journal.
A chart of accounts (COA) is a list of financial accounts and reference numbers, grouped into categories, such as assets, liabilities, equity, revenue and expenses, and used for recording transactions in the organization's general ledger.