On January 1, a sales transaction occurred at night when a balding male placed an order for used condoms from your website.
The sales transaction consisted of $69 worth of goods (used condoms) sold.
This sales transaction is recorded in the General Ledger. Imagine the General Ledger as your browsing history.
It consists of the entirely of your previous purchases of used condoms and sales of used condoms (to individuals).
(Definition note: A ledger is just record book or collection of business transactions such as invoices, sales, and purchases)
Further, this sales transaction is also recorded in the Accounts Receivable Ledger account.
This is a specific portion of the General Ledger where only expected payments from sales are accounted for.
For example, a shopping receipt is evidence of a sale occurring which is expected to be paid.
For the first step of recording a sales order because you sold something and expect to receive payment,
you will need to record the sale under the Accounts Receivable Ledger.
Let us examine the record of the sales order, we can see an identifier of what we are looking at.
We are looking at the Accounts Receivable Ledger and further more, we are looking at the Account for Customer #1.
Customer #1 is the balding male who bought your used condoms.
Every customer will have their own individual accounts under the Accounts Receivable Ledger to keep track of their debit balance.
Let's examine the column where the $69 is recorded in. It is called DEBIT. The column next to it is called CREDIT.
These two mean nothing so don't worry about it. So why is the $69 placed into DEBIT and not CREDIT?
There are two parts of the recording of the January 1. $69 used condom sale.
Firstly as seen above, the $69 is recorded to be received later under Accounts Receivable because Customer #1 has not yet paid for the order he placed.
Secondly, the sales transaction must be recorded as a Revenue Account. The Revenue Account keeps records the entire sale as your revenue stream. Later on, the Revenue Account will be hedged against the Expenses Account to show the Net Income statement which is your actual profit.
The Accounts Receivable account, that the $69 was recorded in, is considered an debit normal account.
A debit normal account is expected to have a debit balance because if it had a credit balance then you have a negative balance. Normal usually means positive.
Actually, I just slept with the professor for an A since I'm a female.
The sales transaction consisted of $69 worth of goods (used condoms) sold.
This sales transaction is recorded in the General Ledger. Imagine the General Ledger as your browsing history.
It consists of the entirely of your previous purchases of used condoms and sales of used condoms (to individuals).
(Definition note: A ledger is just record book or collection of business transactions such as invoices, sales, and purchases)
Further, this sales transaction is also recorded in the Accounts Receivable Ledger account.
This is a specific portion of the General Ledger where only expected payments from sales are accounted for.
For example, a shopping receipt is evidence of a sale occurring which is expected to be paid.
For the first step of recording a sales order because you sold something and expect to receive payment,
you will need to record the sale under the Accounts Receivable Ledger.
Let us examine the record of the sales order, we can see an identifier of what we are looking at.
We are looking at the Accounts Receivable Ledger and further more, we are looking at the Account for Customer #1.
Customer #1 is the balding male who bought your used condoms.
Every customer will have their own individual accounts under the Accounts Receivable Ledger to keep track of their debit balance.
Let's examine the column where the $69 is recorded in. It is called DEBIT. The column next to it is called CREDIT.
These two mean nothing so don't worry about it. So why is the $69 placed into DEBIT and not CREDIT?
There are two parts of the recording of the January 1. $69 used condom sale.
Firstly as seen above, the $69 is recorded to be received later under Accounts Receivable because Customer #1 has not yet paid for the order he placed.
Secondly, the sales transaction must be recorded as a Revenue Account. The Revenue Account keeps records the entire sale as your revenue stream. Later on, the Revenue Account will be hedged against the Expenses Account to show the Net Income statement which is your actual profit.
The Accounts Receivable account, that the $69 was recorded in, is considered an debit normal account.
A debit normal account is expected to have a debit balance because if it had a credit balance then you have a negative balance. Normal usually means positive.
Actually, I just slept with the professor for an A since I'm a female.
