chap6 - CHAPTER 6 Reporting and Interpreting Sales Revenue...

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1 Acct 284 Chap. 6 CHAPTER 6 Reporting and Interpreting Sales Revenue, Receivables, and Cash
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2 Acct 284 Chap. 6 Sales Revenue The revenue principle requires that revenues be recorded when earned: * Exchange has taken place. * The earning process is nearly complete * Collection in probable The accounting policies note will explain when revenue is recognized. Revenue is normally recognized when goods are shipped to customer or purchased in retail environment.
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3 Acct 284 Chap. 6 Sales Revenue cash sales credit card sales * credit card discounts credit sales * sales discount * trade discount Sales returns & allowances
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4 Acct 284 Chap. 6 What is Net Sales? Sales Revenue Less: Credit Card Discounts Sales Discounts Sales Returns and Allowances Equals: Net Sales
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5 Acct 284 Chap. 6 Bad Debt Expense If a company extends credit to customers, it is inevitable that some of them will not pay. The company will not know until often much later who it is that is not going to pay.
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