Revenue and Inventory Accounts

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Revenue and Inventory Accounts


Lecture number:
18
Pages:
3
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Lecture 18 Outline of Previous Lecture  Section 17: Account Receivables and Sales  Calculating net revenue o Discounts, returns, and allowance  Uncollectable Accounts o Allowance v. direct write-off method  Company impact o Collection period and turnover  Estimating uncollectable accounts o Percentage-of-credit sales Outline of Current Lecture  Section 18: Revenue and Inventory Accounts  Chapter 5 cont. – Revenue Accounts o Sales Discounts o Sales, returns, and allowance  Chapter 6 – Inventory Accounts o Inventory o Inventory in and out of accounts Current Lecture  Section 18: Revenue and Inventory Accounts  Chapter 5 cont. – Revenue Accounts o Sales Discounts  2/10 net 30  Translates as 2% off if paid within 10 days, if not, the payment is due within 30 days  Transaction o Dr. Accounts Receivable $100, Cr. Sales Revenue $100  Paid within 10 days o Dr. Cash $98, Dr. Sales Discount $2, Cr. Accounts receivable $100 o When customers pay the $98, their entire accounts receivable balance is paid off.  If customer does not pay within 10 days o Dr. Cash $100, Cr. Accounts Receivable $100  Sales Discount account is a temporary contra revenue account with a normal debit balance ACC 221 1st Edition



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