Question 1 Introduction
When a credit sale is made, the double-entry account entries are a debit to the trade receivable's account and a credit to sales account.
A clothing shop buying T-shirts for resale and paying by cheque will make a debit entry to purchases account and a credit entry to bank account.
A clothing shop buying a computer for use in the business and paying by cheque will make a debit entry to purchases account and a credit entry to bank account.
A computer shop “PC Universe” sells a computer to a customer who pays by debit card. The double-entry will be a debit to bank account and a credit to sales account.
Credit sales is the term given to sales made to customers who pay straightaway.
When a credit sale is made, the double-entry account entries are a debit to the trade receivable's account and a credit to sales account.
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