Recording Cash Sales With a Discount

Bookkeeping Entry for Cash Sales When You Offer a Discount

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Offering a discount to your customers, but not sure how to record it in your bookkeeping journal?

When a small business makes a financial transaction, the bookkeepers need to make an entry in their accounting journal in order to record that transaction. Often, the transaction is recorded in the general journal or a special journal for the most active accounts.

Learn the steps to handling a double-entry bookkeeping journal entry when selling a product or service for cash while offering a discount on the sale.

Example of a Discount Sale

This is an example of how to handle a double-entry bookkeeping journal entry when selling a product or service for cash while offering a discount on the sale.

Here is the scenario: You are the bookkeeper for XYZ Clothing Store. Your store is having a sale and everything is 10% off. A customer has just shopped in your store and purchased the following items:

  • 3 pairs of socks for a total of $12.00
  • 2 men's shirts for a total of $55.00

This makes the sub-total sale $67.00, not including the discount. The sales tax in your state is 6% for a total of $4.02 in sales tax and a $6.70 discount. The sales total is $71.02. Here is the bookkeeping entry you would make, hopefully using your computer accounting software, to record the journal transaction.

Step 1

First, you would enter a debit to cash to your checking account for the amount of the sale plus the 10% discount. This would be the sales of $64.32 (after the discount).

Step 2

Then, you would enter a debit for the amount of the 10% discount, which is $6.70.

Step 3

Next, you would enter a credit to the ($67.00) and Sales Tax Collected ($4.02) accounts. Sales tax is 6%. The entries on the debit side and credit side should always balance.

How to Handle Cash Sale Journal Entries When Offering Full Price

This is an example of how to handle a double-entry bookkeeping journal entry when selling a product or service for cash without offering a discount.

Here is the scenario:

You are the bookkeeper for XYZ Clothing Store. A customer has just shopped in your store and purchased the following items:

  • three pairs of socks for a total of $12.00
  • two men's shirts for a total of $55.00

This makes the total sale $67.00. The sales tax in your state is 6% for a total of $4.02 in sales tax. The sales total is $71.02. The customer plans to buy these items for cash.

Here is the bookkeeping entry you would make using your computer accounting software, to record the journal transaction.

Step 1

First, you would enter a debit to cash to your checking account.

Step 2

Next, you would enter a credit to the Sales and Sales Tax Collected accounts. The entries on the debit side and credit side should always balance

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