Sales refer to the revenue generated from the sale of goods or services by a business. In accounting, sales transactions are recorded using specific entries. When a sale is made, the amount received or expected to be received is credited to accounts like "Accounts Receivable," "Cash," or "Bank Deposit," while the corresponding revenue is debited to "Sales" or "Service Revenue." If applicable, the corresponding VAT (Value Added Tax) is also recorded as a credit to "Taxes Payable."

For example, when a sale is made for $100 with a 10% VAT, the entry would be: Debit Sales: $100 Credit Accounts Receivable: $100 Credit Taxes Payable: $10

In case of a sales return, a reversing entry is made to adjust the initial recording.

It's crucial to accurately record sales to comply with financial reporting standards and calculate key performance indicators such as gross profit and net income. The timing of revenue recognition is determined by the principle of when control over goods or services is transferred to the customer, as per accounting standards like IFRS 15 (Revenue from Contracts with Customers) or ASC 606 (Revenue from Contracts with Customers) in the U.S. GAAP.