Sales Revenue: debit or credit?
Sales Revenue increases on the credit side and decreases on the debit side: its normal balance is a credit.
Revenue increases equity through the business’s sales and other income. It increases with a credit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | Sales Revenue |
| Spain (PGC 2007) | 700 Ventas de mercaderías |
| France (PCG 2025) | 707 Ventes de marchandises |
| Germany (generic accounts) | Umsatzerlöse |
Practice entries that use this account
- Owner takes goods from stock for personal use
- Cash sale of merchandise (periodic inventory)
- Sale on account with a trade discount
- Cash sale with cost of goods sold (perpetual inventory)
- Sale on account with cost of goods sold
- Customer returns goods bought on credit (periodic inventory)
- Customer returns goods for a cash refund, restocked (perpetual inventory)
- Customer pays within the discount period
- Selling merchandise on account with sales tax
- Cash sales with sales tax included in the total
- Invoicing a client for services rendered
- Service paid for on completion
- Delivering a service the customer paid in advance
- Sale paid partly in cash, partly on account
- Receiving rent for a van rented out
- Accruing revenue earned but not yet invoiced
- Revenue received in advance: year-end adjustment
- Closing the revenue accounts to Income Summary
- Correcting a customer payment posted to the wrong account
- Closing a company’s year: revenues and expenses to the result account
- Credit sale, return, then payment within the discount period
- Final invoice for a service after a deposit