What are Sales?

Sales in accounting is a term that refers to any operating revenues that a company earns through its business activities, such as selling goods, services, products, etc.

It is important to note that sales are operating revenues; for example, if a company sells noncurrent assets, it isn't recorded in its Sales account.

At the time of the sales transaction, the amounts that are recorded are known as 'gross sales' because there may be further subtractions, such as discounts, sales returns, or sales allowances. After these subtractions have been made, the sales are then known as 'net sales.'

With accrual accounting, revenue is recorded as sales if the goods or services have been delivered to the customer. In cash accounting, the revenue is only recorded if the money has actually been received for the goods or services delivered.