Introduction to Financial Accounting AMIS 211 – Professor Marc Smith 1 Chapter 7, Module 1 Chapter 7, Module 1 Slide 1 AMIS 211Introduction to Financial AccountingProfessor Marc SmithChapter 7 Module 1Chapter 7 Module 1Hi everyone. In this chapter we are going to talk about an issue that is very important and has a very important impact on a company’s financial statements. Now, please go to the next slide and let’s go ahead to the next slide.
has intentionally blurred sections.
Sign up to view the full version.
Introduction to Financial Accounting AMIS 211 – Professor Marc Smith 2 Chapter 7, Module 1 Slide 2 Chapter 7 Module 1: Sales of our ProductSales of our ProductQuestion:Which financial statementaccounts are affected?Income StatementBalance Sheet1.Sales Revenue1. Accounts Receivable2.Cost of Goods Sold2. InventoryAnd, the issue that we are going to deal with is sales of our product—sales of our inventory to our customers. And, the first question that we have to answer is this: What financial statement accounts are affected when we have sales of our product? The accounts that are affected on the financial statements: On the Income Statement: we have to record the Sales Revenue—the revenue earned from selling the product; and the Cost of Goods Sold (CGS)—the cost of the inventory sold to customers. On the Balance Sheet: we have to record the Accounts Receivable that we get from selling the goods; and we have to reduce the inventory to reflect the fact we no longer own it. In this chapter—in this particular chapter—we will focus on those two right there. We will focus on the Sales Revenue and the Accounts Receivable.