You will need to post your invoices to the Sales Ledger (the record of all the sales that are made) and the appropriate Nominal Account for the Customer who you have invoiced. This latter is a record of all of the business you have done with and how payments have been made by each Customer. A Nominal Account is not really necessary for cash transactions. The transactions can be seen in the following ‘T’ charts that show a completed Credit transaction for a Customer (X for the actual Sale and O for the Cash involved) and a Cash Sale of # shown in the Sales ledger as well as in the Cash

Sales Receive Db Give Cr   X #

28-Feb-2010s="style2"> Nominal - Customer Receive Db Give Cr X O

Cash Receive Db Give Cr O   #

Until the cash is received the Nominal Accounts will show a Debit balance in the Balance Sheet

If the Customer never pays and the goods are not recovered the transaction becomes a Bad Debt and that Sales item would be reversed

 

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Last Update 28-Feb-2010

Date first published 07-Nov-2005