ACCY 202 1st Edition Lecture 6Outline of Last LectureI. FOB Shipping Point- Freight Prepaid1. Date of Recording2. Shipping CostsII. Journal Entries1. Balance Sheet and Income StatementIII. Cash Payment1. Gross method2. Purchase DiscountOutline of Current LectureI. Debits vs. Credits1. General RuleA. DebitsB. CreditsII. Balance Sheet Income Statement1. Cash/Accounts Receivable2. InventoryIII. Contra Revenue Accounts1. Sales Returns & Allowances2. Sales Discounts3. Credit Card Service FeesIV. Gross Profits1. Definition2. Also Known AsCurrent LectureI. Debits vs. Credits1. General RuleA. Debits – on the asset side of the balance sheet to represent the amount in the account going upThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.B. Credits – on the liability and equity side of the income statement that represents the account going upII. Balance Sheet Income Statement1. Cash and accounts receivable on the Balance Sheet go to sales on the Income Statement2. Inventory on the Balance Sheet goes to COMS (Cost of Merchandise Sold) which is exactly like Cost of Goods SoldIII. Contra Revenue Accounts1. Sales Returns & Allowances2. Sales Discounts3. Credit Card Service FeesIV. Gross Profit1. Definition: After everything is paid out on the Income Statement2. Also Known As: “Thin Margin” “Gross Thin Profit” “What the company has to work with”3. How profitable a company is after considering cost of
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