225 Cash Sales

Assets

Receivables

Synopsis

Account 225 is established to record the cash received as a result of Sales transactions processed at the dealership.

Debits

Credits

Sales for cash

Cash received from cash sales
Cash refunds for return of merchandise by customers

Example 1

Record a customer cash sale of $618 for mechanical labor and parts. The customer labor is $340. The parts sale is $250. The sales tax is $13 and the shop supplies are $15. The cost of labor is $100. The parts cost is $80 and the cost of shop supplies is $13.

Journal: Service Sales - Cash

Entry:		Debit	Credit
Account 225	Cash Sales	$618
Account 660A	Cost of Sales – Customer Labor – Cars & Light Duty Trucks	$100
Account 667	Cost of Sales – Parts Mechanical Repair Orders & Light Duty Trucks	$80
Account 669	Cost of Sales – Shop Supplies	$13
Account 242	Inventory – Parts & Accessories		$80
Account 242	Inventory – Parts & Accessories		$13
Account 247A	Inventory – Work in Process – Mechanical		$100
Account 324	Sales Taxes Payable		$13
Account 460A	Sales – Customer Labor – Cars & Light Duty Trucks		$340
Account 467	Sales – Parts Mechanical Repair Orders & Light Duty Trucks		$250
Account 469	Sales – Shop Supplies		$15

Example 2

Record a customer cash sale of $3,740 for body shop labor, parts and materials. The body labor sale is $740 and the paint labor sale is $595. The parts sale is $1,975. The paint and body shop materials are $315 and the sales tax is $115. The cost of labor is $795 with $350 due to paint labor and $445 for body shop labor. The parts cost is $1,380. The cost of body shop materials is $235.

Journal: Service Sales - Cash

Entry:		Debit	Credit
Account 225	Cash Sales	$3,740
Account 670	Cost of Sales – Customer Paint Labor – Cars & Trucks	$350
Account 671	Cost of Sales – Customer Body Labor – Cars & Truck	$445
Account 677	Cost of Sales – Parts – Body Customer Repair Orders – Cars & Trucks	$1,380
Account 679	Cost of Sales – Paint & Body Shop Materials	$235
Account 242	Inventory – Parts & Accessories		$1,380
Account 245	Inventory – Paint & Body Shop Materials		$235
Account 247B	Inventory – Work in Process – Body Shop		$795
Account 324	Sales Taxes Payable		$115
Account 470	Sales – Customer Paint Labor – Cars & Trucks		$595
Account 471	Sales – Customer Body Labor – Cars & Trucks		$740
Account 477	Sales – Parts – Body Customer Repair Orders – Cars & Trucks		$1,975
Account 479	Sales – Paint & Body Shop Materials		$315

Example 3

Record a bank deposit of $10,587 for Mechanical, Body Shop and Parts daily cash Sales

Journal: Cash Receipts

Entry:		Debit	Credit
202	Cash in Bank	$10,587
225	Cash Sales		$10,587

Note:

This is a clearing account for cash sales and normally should have no month-end balance. If a balance exists, a month-end schedule should be prepared to determine the nature of the balance. The balance should be classified with the applicable asset and liability accounts on the trial balance.