Mullis Company sold merchandise on account to a customer for $625, terms n/30. The journal entry to record this sale transaction would be:

The journal entry to record this sale transaction would be:

-Debit accounts receivable (845)

-credit sales (845)

When we sold a product on account, we still haven't receive any form of payment for the buyer, so we record it as an account receivable on the credit.

But, this transaction is still considered as sales, so we record an increase of sales, which always written on the side of the credit.