Financial Accounting Ch8 Notes - Financial Accounting Chapter 8 Notes SALES AND CASH RECEIPTS SALES ACTIVITY Just as merchandizing businesses follow

Financial Accounting Ch8 Notes - Financial Accounting...

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Financial Accounting Chapter 8 Notes SALES AND CASH RECEIPTS SALES ACTIVITY Just as merchandizing businesses follow certain procedures to process and record purchases, they follow certain procedures to process and record sales. Terms of Payment Revolving charge plans are set up so that you can pay a percentage plus a finance charge on a monthly basis. Credit terms – allow the purchaser a certain amount of time to pay N/EOM – PAYMENT must be made by the end of the month SALES ORDER A Sales Invoice is prepared when the sale is made. CASH SALES—sales slip or cash register tape will be record of sale RECORDING SALES OF MERCHANDISE SALES ACCOUNT is a temporary account with a normal credit balance. It is ONLY used to record the sale of merchandise on account. In a General Journal Sales is credited; Cash is debited. CREDIT SALES —Accounts Receivable, the controlling account, and the individual account is debited.
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