Journal Entry for Goods Sold and Deposited into Bank

Selling goods is a common transaction for any business entity. When goods are sold and the amount received is deposited into the bank, a journal entry is recorded to reflect the transaction. The following is a detailed explanation of the journal entry for goods sold for Rs. 50,000 and deposited into the bank:

Step 1: Record the Sale of Goods
When goods are sold, the first step is to record the sale. The journal entry for this will be:

Sales A/c - Debit Rs. 50,000
To Debtors A/c - Credit Rs. 50,000

In this entry, the Sales account is debited, and the Debtors account is credited. The Sales account records the revenue earned from the sale of goods, and the Debtors account reflects the amount due from the customer.

Step 2: Record the Receipt of Payment
Once the customer pays the amount due, the next step is to record the receipt of payment. The journal entry for this will be:

Bank A/c - Debit Rs. 50,000
To Debtors A/c - Credit Rs. 50,000

In this entry, the Bank account is debited, and the Debtors account is credited. The Bank account records the receipt of payment, and the Debtors account reflects the reduction in the amount due from the customer.

Step 3: Record the Cost of Goods Sold
The cost of goods sold is the cost of producing or acquiring the goods that were sold. This cost is deducted from the revenue earned to arrive at the gross profit. The journal entry for the cost of goods sold will be:

Cost of Goods Sold A/c - Debit Rs. X
To Inventory A/c - Credit Rs. X

In this entry, the Cost of Goods Sold account is debited, and the Inventory account is credited. The Cost of Goods Sold account reflects the expense incurred to produce or acquire the goods sold, and the Inventory account reflects the reduction in the quantity of goods available for sale.

Step 4: Record the Gross Profit
The gross profit is the difference between the revenue earned and the cost of goods sold. The journal entry for the gross profit will be:

Gross Profit A/c - Debit Rs. Y
To Sales A/c - Credit Rs. Y

In this entry, the Gross Profit account is debited, and the Sales account is credited. The Gross Profit account reflects the profit earned from the sale of goods, and the Sales account reflects the revenue earned.

In conclusion, the journal entry for goods sold for Rs. 50,000 and deposited into the bank would be as follows:

Bank A/c - Debit Rs. 50,000
To Debtors A/c - Credit Rs. 50,000
Cost of Goods Sold A/c - Debit Rs. X
To Inventory A/c - Credit Rs. X
Gross Profit A/c - Debit Rs. Y
To Sales A/c - Credit Rs. Y

Cash a/c dr. 50k to sales a/c. 50k
bank a/c. dr. 50k to cash a/c. 50k