In the previous example, we were looking at the chart of accounts and determining what transactions created the entries. Next, we will sell an item to a customer and see exactly how that transaction affects the accounting entries in the journal.

Let's begin by creating a new sales order.

Go to Sales and click on Orders to bring up the sales order listing. Click on Create to create a new sales order:

If you have followed along with our examples then you will already have the customer and product entered to create the sample sales order. Otherwise, you will need to add a customer and a product if you wish to follow along on your computer. In this example, we have created a sales order for five Medium White T-Shirts. Make sure, you click Confirm Sale to create the sales order.

At this point, if you were to go and look at the journal entry listing, you will not see any additional journal entries. Why is this? The way Odoo is currently configured means that we must manually create an invoice. As long as you are in the To Invoice status, you will not see any transactions in accounting.

Only when we click on the Create Invoice button at the top of the screen will Odoo actually create accounting transactions.

Click on Create Invoice to generate a draft invoice for this sales order:

Odoo will present you with a wizard that allows you to determine how you wish to invoice. Please note that the primary difference is in how down payments are handled. As we have no down payments, we are fine to take the default option of Invoiceable lines (deduct down payments). If we did have a down payment, then it would be deducted automatically from the invoice total.

Click on Create and View Invoices:

Because this is just a Draft Invoice, if you look at the journal entries, you will see no changes. However, if you look at the Draft Invoice, you can see the transactions that will be created once you validate the invoice.

In the line item of the invoice, you will see the 200000 Product Sales account. This will be the account that will be credited for the sale of the medium white T-shirts the customer has purchased.

Choose the Other Info page on the Invoice form. Note that under Account, it reads 101200 Account Receivable; this account will be debited to record the amount the customer owes to the company once the invoice is generated.

You can also see that this invoice will post $12.38 to the 111200 Tax Received account:

Click on Validate to post the invoice and create the transactions.