Question

List and explain, in your own words, the usage of the journals within the Revenue Cycle

Answer 1

The basic three entries posted in a revenue cycle are as follows:

Particular	DEbit	Credit
Sales	xxx
Accounts Receivable		xxx
(being sales on account recorded)
COGS	xxx
Inventory		xxx
(being inventory sold recorded)
Cash	xxx
Accounts Receivable		xxx
(Being cash received for sales made on account)

Revenue cycle refers to the time starting from the point sales is made to the time when accounts due is received. Here, in record the aforesaid transactions we take use of Sales journal and cash, they are used to record the sales made as well as the cash received of the sale made. If we do not journals than it would not be possible to have figures of the sales made and the cash recieved from the sales made.