To recover missing credit sales, rebuild the trade receivables account and find the figure that makes both sides equal. This appears in incomplete-records questions whenever the sales book or sales ledger is not available.
The skill sits inside incomplete records and builds on receivables and allowances.
Why can credit sales be found from the receivables account?
Every credit sale is recorded as a debit in the trade receivables account. Every collection, discount and write-off reduces the debt on the credit side. So the account tells a complete story, and one missing item can be calculated.
You know the opening balance, the closing balance and everything that left the account. The only unknown is what came in, and that is the credit sales.
How to find the figure, step by step
- Draw the receivables account with debit on the left and credit on the right.
- Enter the opening balance on the debit side.
- Enter every reduction on the credit side: cash or bank received from customers, discount allowed, irrecoverable debts written off, returns inwards.
- Enter the closing balance on the credit side as the balance carried down.
- Total the credit side, then place the same total on the debit side.
- Credit sales = the debit total less the opening balance.
Worked example
Kedai Buku Pelangi has lost its sales book. The owner supplies these figures for the year.
- Trade receivables at the start: RM4,200
- Cash received from credit customers: RM38,600
- Discount allowed: RM400
- Debts written off as irrecoverable: RM300
- Trade receivables at the end: RM5,100
- Cash sales (from the till roll): RM12,000
| Trade receivables account | RM | RM | |
|---|---|---|---|
| Balance b/d | 4,200 | Bank | 38,600 |
| Credit sales (balancing figure) | 40,200 | Discount allowed | 400 |
| Irrecoverable debts | 300 | ||
| Balance c/d | 5,100 | ||
| 44,400 | 44,400 |
Check of the credit side: 38,600 + 400 + 300 + 5,100 = 44,400. Credit sales: 44,400 − 4,200 = 40,200. Total sales: 40,200 + 12,000 = RM52,200.
The mistake to watch for
A common slip is to use only the cash received and the two balances, ignoring the discount and the write-off.
Mistaken working: 38,600 + 5,100 − 4,200 = 39,500
The student treated cash received as the only way a debt can disappear. That leaves out RM700 of debt that was cleared without cash.
The correction is to list every credit-side item before totalling. Discounts and bad debts reduce what customers owe even though no money arrives. Leaving them out understates sales by exactly their total, here 700.
Check yourself
Work each one on paper, then open the answer.
1. Receivables were RM2,000 at the start and RM2,600 at the end. Customers paid RM15,000. Find credit sales.
Show answer
Credit side: 15,000 + 2,600 = 17,600. Credit sales = 17,600 − 2,000 = RM15,600.
2. Opening receivables RM6,500; closing RM7,300; cash received RM52,000; discount allowed RM800; returns inwards RM1,200. Find gross credit sales.
Show answer
Credit side: 52,000 + 800 + 1,200 + 7,300 = 61,300. Gross credit sales = 61,300 − 6,500 = RM54,800.
3. Opening receivables RM1,500; closing RM900; cash received RM24,000; irrecoverable debts RM600. Find credit sales.
Show answer
Credit side: 24,000 + 600 + 900 = 25,500. Credit sales = 25,500 − 1,500 = RM24,000.
Where this leads next
The same idea works for the other side of the business in deriving purchases from a payables movement. Practise both in the incomplete records practice set, and use the double-entry and ledger trainer to rebuild the account with a posting trace.
Some students can balance the account in class but freeze when no figure is flagged as missing. That is a pattern our teachers look for in online one-to-one Accounting tuition.