A sales journal is a subsidiary ledger used to store detailed sales transactions. Its main purpose is to remove a source of high-volume transactions from the general ledger, thereby streamlining the general ledger. The following information is typically stored in the sales journal for each sale transaction:
- Transaction date
- Account number
- Customer name
- Invoice number
- Sale amount (debit the accounts receivable account and credit the sale account)
The journal only stores receivables; this means that sales made in cash are not recorded in the sales journal. A sale made in cash would instead be recorded in the cash receipts journal.
In short, the information stored in this journal is a summary of the invoices issued to customers.
At the end of each reporting period, the sum total of the debits and credits is posted to the general ledger. If anyone wants to research these posted balances listed in the general ledger, they refer back to the sales journal, and may use the invoice number listed in the sales journal to access a copy of the invoice.
The sales journal concept is mostly confined to manual accounting systems; it is not always used in computerized accounting systems.