Accounting Summary2

Accounting Summary2 - 6-102/10, n/302/10,...

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Unformatted text preview: 6-102/10, n/302/10, n/30DiscountPercentage # of Days in Discount PeriodOtherwise, the Full Amount Is Due Maximum Days in Credit PeriodSales DiscountsChapter 6Net sales = sales revenue (credit card discounts + sales discounts + sales returns and allowances [debited for damaged and returned merchandise])Sales returns and allowances = contra revenue accountCredit cards customer sale = company pays fee to provider but increase sales, minimizes losses from bad checks and fraudulent credit card sales, quicker payment and avoids providing credit directly to customerGross profit percentage= gross profit / net salesHigher gross profit = higher markupAll other things equal, higher gross profit is higher net incomeBecause of matching principle, bad debt expense (estimate) and sales revenueEstimate bad debit expense by percentage of credit card sales and aging of accounts receivablePercentage based on credit card sales from previous years that were uncollectedAmount estimated = credit sales * percent estimated...
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This note was uploaded on 04/22/2008 for the course ACCT 2251 taught by Professor Lilysieux during the Winter '07 term at CSU East Bay.

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Accounting Summary2 - 6-102/10, n/302/10,...

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