CHAPTER 3
Recording what
you sell
I
n this chapter you will learn how to record sales of a business. We’ll
start with the recording of sales for two reasons: (1) it is a nice easy
introduction and (2) because income from sales is so important to
any business.
Sales can refer to the sale of goods (e.g. a laptop) or the provision of a
service (e.g. repairs to a laptop). I’ll also introduce value added tax. First,
we’ll look at cash sales, then credit sales and finally some further sales-related
transactions. In each section you’ll be shown first how to record sales in a
traditional manual format. Then, you’ll be introduced to the QuickBooks
accounting software for the first time, showing how sales are recorded.
Recording cash sales
Many businesses receive payment immediately for the goods or services
they provide. Some examples would be newsagents, doctors’ practices
and fast-food outlets. When a sale is made and payment received at the
same time, this is referred to as a cash sale.
You might think of cash sales as those where notes and coins are
exchanged, but of course cash sales include many other payment forms,
e.g. debit cards, credit cards, PayPal and any other electronic payment
format. Regardless of the payment format, cash sales are usually lodged
on a regular basis to the business bank account.
In book-keeping terms, for most businesses a cash sale means making
sure the sale is recorded and that a receipt is given to the customer for
the cash received. Cash sales are often recorded using a cash register of
some kind. In most large retail stores, for example, you’ll see that barcode
32 brilliant book-keeping
scanners are linked to cash registers and automatically record the sale,
whereas in some smaller stores, the operator usually has to key in a sale.
Some small businesses may not have a cash reg-
ister, or the volume of cash sales is quite small.
If this is the case, a handwritten receipt can be
used. Ideally, there should be two copies of the
receipt, one for the business and one for the
customer. Figure 3.1 shows an example of such
a receipt.
brilliant
tip
Always issue a receipt for a cash sale. It is a record of the cash received and
provides the customer with proof of purchase.
Figure 3.1 Sample sale receipt
SALE RECEIPT NO. 346
DATE DESCRIPTION AMOUNT
Customer:
John T a ylor, 51 Pa rk St, Southend
Freds Fax & Copy Centre,
40 High St,
Northend
23 July 2010
SUBTOTAL
VAT
£50.00
£20.00
£70.00
£12.25
£82.25TOTAL
Binding of promotional brochures
10 reams of A4 paper
ideally, there should
be two copies of the
receipt, one for the
business and one for the
customer
Whether a receipt is handwritten or printed from a cash register it con-
tains a lot of useful information for book-keepers. Looking at Figure
3.1 you can see why. The amount of cash collected is shown, the type of
products sold, the quantity sold, and the VAT charged. A receipt printed
from a cash register would contain similar details. The difference with an
automated system such as a cash register is that the sales for the day are
usually summarised automatically – no need for a calculator to tot up all
receipts. Each sale could also be used to reduce the amount of goods in
stock (see Chapter 7), a task that is easily done once you have some form

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