Accounting for sales

Freddys_Flat

Hi

If I make a commission based sale, and it is paid 2 months after I made the sale - at what point would I put it into my accounts - at the time of sale or when the commission is paid.

I was at a business course and I'm a little confused about the sales book, cash flow and profit and loss and where to account for it (especially for the self assessment and when the above happens in March)

My accounting period is april to april and I am a sole trader.

Hope you can help

Thanks

Karen

timnicebutdim_2

The official date would be when the sale is made i.e. invoice date/tax point.

If you are providing sales on credit, you would credit sales, debit sales ledger control account. Once you've received the money you would debit bank and credit sales ledger control account.

Maybe basic book keeping would help if you need it, otherwise try and understand the profit and loss account/balance sheet before as this is where all of the transactions feed in.

Freddys_Flat

Hi

Thank you for clarifying that - that's great and means I can get started with my books.

I'm booked on a basic book keeping course with Business Link soon, so I'm looking forward to that - it should help.

Thanks again

Karen

DCodd

I'm not so sure that is correct. I would say that it depends on what you are selling, how you are selling it and how you apply for and or are being paid the commission.