Chapter_5_Key_Terms_and_Concepts

Chapter_5_Key_Terms_and_Concepts - 500 Merchandise...

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Chapter 5 Key Terms and Concepts Multi-step Income statement Sales Less: sales Returns and allowances Sales discounts Net sales Less: Cost of merchandise sold Gross profit Less: Operating expenses ( selling and admin expenses) Income from operations Other income or expense Net income Entries for sales using perpetual method: Sale on account: of $3,000, COMS = 1,500, terms 2/10, net 30 Accounts Receivable 3,000 Sales 3,000 Cost of merchandise Sold 1,500 Merchandise inventory 1,500 Return of $500 Sales Returns and allowances 500 Accounts Receivable
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Unformatted text preview: 500 Merchandise inventory 250 COMS 250 Payment received within discount period Cash ( 3,000 –500) * .98 2,450 Sales Discount (3,000 – 500) *.02 50 Account Receivable 2,500 Entries for Purchases using perpetual method Purchase of 2,000, terms 3/15 Merchandise inventory 2,000 Accounts Payable 2,000 Return of $400 Accounts Payable 400 Merchandise inventory 400 Payment within discount period Account Payable ( 2,000 – 400) 1,600 Merchandise inventory 48 (1,600 * .03) Cash ( 1600 * .97) 1,552...
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