MaterialRvwS5 - Section 5 Review of Material Net Sales =...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Section 5 Review of Material Net Sales = Sales Revenue – Sales Discounts - Returns and Allowances - Credit Card Discounts Contra-revenue accounts o Credit Card Discounts – debited when incurred; amount in the receivable account (also debited) is the difference between the Sales Revenue amount and the credit card discount o Sales Discounts - recorded when the payment is received within the discount period o Sales Returns and Allowances – debited when items are returned; Accounts Receivable decrease (credit) Accounting for bad debts o Most businesses create a contra-asset account called “Allowance for Bad Debt” with a credit balance for payments they do not expect to receive o When they are certain these payments will never come, they decrease the Allowance for Bad Debt (debit) and the Accounts Receivable (credit) accounts How do companies estimate the amount that should be in their Allowance for Bad Debt account?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/27/2008 for the course AEM 2210 taught by Professor Little,j. during the Fall '07 term at Cornell University (Engineering School).

Page1 / 2

MaterialRvwS5 - Section 5 Review of Material Net Sales =...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online