General Journal Closing for Sales

by Lisa
(Lansing, MI, USA)

When doing a general journal closing I am supposed to start with sales. Do I subtract sales returns and allowances and discounts in order to close revenue account? Or is that used later? Can you show me an example of a general journal closing for a business who is a wholesaler in the auto parts business, they use cogs, etc...


Thanks for your question Lisa. Yes, you should close off sales returns and transfer the balance of this account to sales. Sales discounts are usually not recorded in their own account (usually the net amount of the sale is simply recorded as the value of the sale in the "sales" account) but if sales discounts are recorded in their own account, you should close this off and transfer the balance to the sales account too. The balance of the sales account will be the final total/net sales for the period. This figure can then go on the P & L.

Comments for General Journal Closing for Sales

Click here to add your own comments

Thanks
by: Marshal

Thanks for your explanation. It has been very helpful for me with my studies and I had been asking about the same on so many forums and it was from here that I got a reasonable and decent explanation.

Click here to add your own comments

Return to Ask a Question About This Lesson!.









© Copyright 2009-2021 Michael Celender. All Rights Reserved. 
Click here for Privacy Policy.