1. Sales Invoices
Double Entry

2. Sales have a credit balance in the Trial Balance
Sales are the delivery or exchange of services or products for a payment from another party. Every business is involved in the delivery of at least one service or involved in the sale of at least one product.
Sales are categorised as Cash Sales or Credit Sales.
The sales figure in the trial balance is made up of an accumulation of all the net sales amount that would have occurred in an accounting period.
This can be visualized from the illustration to follow.
Sales have a credit balance in the Trial Balance

3. Imagine you work for J&N Ltd, a company that sells kitchen utensils
Imagine you work for J&N Ltd, a company that sells kitchen utensils. The following two Sales Invoices were dealt with in the accounting period.

5. Double Entry treatment
In accounting for these sales invoices, you will realise that there is an
Increase in Sales
Increase in VAT owed to HMRC
Increase in debtors, since the customers have not yet paid

6. Hence, the double entry posting will be:
Dr: Debtors
Cr: Sales
Cr: VAT

7. DEAD/ CLIC DEAD stands for: Debit Expenses Assets Drawings
DEBIT TRANSACTIONS
If any of these are increasing, you will need to debit the account
CLIC stands for:
Credit
Liabilities
Income
Capital
CREDIT TRANSACTIONS
If any of these are increasing, you will need to credit the account

8. Trial Balance Dr Cr £ Sales 4,216.50 VAT 843.30 Debtors 5,059.80
Totals
The total of the debit must equal the total of the credit in a trial balance. This trial balance has been set on the assumption that this is a new business which had only two sales transactions in the accounting period and the customers have not paid for the invoices.

9. This shows that:
Sales Income (CLIC) was credited with the TOTAL NET AMOUNT
VAT Liability (CLIC) was credited with the
TOTAL VAT AMOUNT
Debtors Asset (DEAD) was debited with the TOTAL GROSS AMOUNT

10. Here at The Training Place of Excellence, we aim at giving people a good understanding of accounts and in doing this; we always try to connect the teaching to the real world.