ACC321test2study

ACC321test2study - ACC 321 CHAPTER 7 1. Receivables: a....

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ACC 321 – CHAPTER 7 1. Receivables: a. Trade Receivables: Defined: IOU from our customers Ex: AR, Notes Receivables b. Nontrade Receivables: Defined: IOU’s from other Examples: Deposits, Interest Receivable, Tax Refund receivable 2. Recognitions of Receivables: a. Discounts i. Trade discounts: A percentage reduction from the list price Why?: - a way to change pirces without publishing a new catalog - used to disguise real prices from competitors - used to give quantity discounts to large customers How do we account for trade discounts - the discount is recognized indirectly by recording the slae at the net of discount - ex: when giving 10% discount to preferred customer, discount recognized indirectly by recording the sale at a net of discount price of 90%, not at list price ii. Cash discounts: - Not a trade discount, but a reduction in the amount to be paid by a customer if paid within a specified period of time, and incentive for a quick payment - General info: 2/10, n/45 - Gross: from an accounting perspective assume that the entire discount
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This document was uploaded on 11/02/2011 for the course ACC 321 at Miami University.

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ACC321test2study - ACC 321 CHAPTER 7 1. Receivables: a....

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