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Unformatted text preview: th . The criteria for revenue recognition were not yet met. b. 8-12 Delivery Account receivable 50,000 Sales Revenue 50,000 c. 9-10 payment The cash discount was 2% 2% x 50,000=1000 Cash 49,000 Cash discount on Sales 1,000 Accounts Receivable 50,000 Total record cash payment received d. 12-18 Returns instead of decreasing account receivable for the merchandise returned, a cash refund equal to the amount actually paid for the books, 3,000 – (2% x 3,000) = 2,940 is made. Sales returns and allowances 2,940 Cash 2,940 to record the cash refund on the books 2. Gross Sales 50,000 Deduct: Sales returns and allowances 2,940 Cash discount on Sales 1,000 3,940 Net Sales 46,060...
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- Spring '11
- Generally Accepted Accounting Principles, Syed Abdullah Mannan