Journal Entry for Cash Sales of Goods

The journal entry for the above transaction would be as follows:

Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.)
-----|------------|-----|-------------|-------------
[Date] | Cash A/c | Dr. | 50000 |
| Sales A/c | Cr. | | 50000
| Cost of Goods Sold A/c | Dr. | 40000 |
| Inventory A/c | Cr. | | 40000

Explanation

The above transaction involves the following accounts:

1. Cash A/c: It is a real account and represents the cash received from the customer in exchange for goods sold. It is debited in the journal entry as cash has come in.

2. Sales A/c: It is a nominal account and represents the revenue earned by the business through the sale of goods. It is credited in the journal entry as it is an income for the business.

3. Cost of Goods Sold A/c: It is a nominal account and represents the cost incurred by the business to produce the goods sold. It is debited in the journal entry to record the expense.

4. Inventory A/c: It is a real account and represents the stock of goods held by the business for sale. It is credited in the journal entry as the goods sold are no longer part of the inventory.

The journal entry follows the double-entry accounting system, which states that every transaction has two aspects - debit and credit. In this case, the cash account is debited, and the sales account is credited for the same amount of Rs. 50000. Similarly, the cost of goods sold account is debited, and the inventory account is credited for the same amount of Rs. 40000.

Overall, the journal entry helps in recording the transaction accurately and maintaining the financial records of the business.