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Difficulty: MediumSales Journal and Sales Returns Journal

During June 2026, Chidex Enterprises completed the following sales transactions:

• Sold trading goods on credit to K. Bello with a list price of ��150,000\text{��}150,000, subject to a 10%10\% trade discount.
• Sold old office equipment on credit to T. Audu for ₦45,000\text{₦}45,000.
• Sold trading goods for cash to S. Okafor for ₦30,000\text{₦}30,000.

What is the total amount to be recorded in the Sales Journal for the month?

  1. ₦135,000\text{₦}135,000Answer
  2. B
    ₦150,000\text{₦}150,000
  3. C
    ₦165,000\text{₦}165,000
  4. D
    ₦180,000\text{₦}180,000

Answer

₦135,000\text{₦}135,000
The Sales Journal (or Sales Day Book) is used strictly to record credit sales of inventory intended for resale. Trade discounts are deducted before recording. Therefore, only the credit sale to K. Bello (₦150,000\text{₦}150,000 less 10%10\% trade discount =₦135,000= \text{₦}135,000) is entered.

Step-by-Step Solution

1
Calculate the net value of credit sales of inventory after trade discount.
Net credit sales = ₦150,000−(0.10×₦150,000)=₦135,000\text{₦}150,000 - (0.10 \times \text{₦}150,000) = \text{₦}135,000.
Trade discount must be deducted before entering transactions into the Sales Journal.
2
Evaluate the eligibility of non-current asset sales for the Sales Journal.
The sale of old office equipment for ₦45,000\text{₦}45,000 is excluded.
The Sales Journal is exclusively for credit sales of inventory/goods. Credit sales of non-current assets are recorded in the General Journal.
3
Evaluate the eligibility of cash sales for the Sales Journal.
The cash sale of goods for ₦30,000\text{₦}30,000 is excluded.
Cash sales are entered directly in the Cash Book, not the Sales Journal.
4
Sum up all eligible amounts for the Sales Journal.
Total Sales Journal entry = ₦135,000\text{₦}135,000.
Only the net credit sale of inventory is entered into the Sales Journal.

Key Concept

Scope and Entry Rules for the Sales Journal (Sales Day Book)
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Topics

Sales Journal and Sales Returns Journal

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