Lecture 6 Notes - Chapter 6 Reporting Sales Revenue...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 10
Background image of page 11
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 6 Reporting Sales Revenue Receivables, and Cash Part I Cost of goods sold expense Selling, general, and administrative expense Research and development expense rum expense Total expenses Premx income Income tax expense Net income Total M’ «pity Total and stockholders’ equity The note: are an integral part of that financial statements. 3 Sections of Chapter 1. Accounting for Sales Revenue a. Credit card sales to consumers b. Sales discounts to businesses c. Sales returns and allowances d. How the above 3 help report Net Sales e. Gross Profit Percentage 2. Measuring and Reporting Receivables a. Bad Debts Expense adjusting entry - Percentage of Credit Sales Method - Aging of Accounts Receivable Method 3. Reporting and Safeguarding Cash Revenue Principle 1. Revenues recorded when earned a. Delivery occurred or services rendered ' b. Persuasive evidence of an arrangement for payment c. Price is fixed or determinable d. Collection is reasonably assured 3 Common Ways to Increase Sales 1. Allow consumers to use credit cards to pay for purchases 2. Provide business customers direct credit and give them discounts for early payment. 3. Allow returns of merchandise (under certain circumstances.) Credit Card Sales to Consumers Pros — Cons -— Income Statement Sales Revenue 3,000 Less: Credit Card discounts 90 (3% x $3000) Net Sales 2,910 Sales Discounts to Business Customers Pros — Cons — 2/10,n/30 Income Statement Sales Revenue 2,000 Less: Sales discounts 40 (2% x $2000) Net Sales 1,960 Cons — Income Statement Sales Revenue 3,000 Less: Returns & Allowances 1,000 (33% X $3000) Net Sales 2,000 Reporting Net Sales Company can have 0, 1, 2, or all 3: Income Statement Sales Revenue Less: Credit Card Discounts Sales Discounts Sales Returns and Allowances Net Sales XX XX XX XX XX Gross Profit Margin Gross Profit / Net Sales What is Gross Profit? Net Sales Revenue — COGS Comparing companies: - Ability to charge premium price. - Assess effectiveness of production - Assess effectiveness of marketing, advertising, and other expenses Similar to Net Profit Margin in Chap 3.... Net Profit / Net Sales 03mm 39$ :29: 8836.8 momzmzo ._ 2:6 mmmvoxopqamm 22 mm<mzcm :oo flooo 000m woo woo 03mm U83 woo woo >__ 2:2 mxumzmmm 2:8 29? >a<m:_m3o_ may 30 $0 2m" 383m So mo 08%. U83 :29: o.m.\. oNo mnmzmzo N 2:3 Emmooxopaamm 22 mm<mocm Nooo fiooo 000m fiwoo moo 98mm USE woo woo >__ 0:54 9:558 2:8 mag. >a<m3m3© £8 moo 5o IIIIIII'III'II 2m” 383m no mo 08mm 30% 2563 0.8 o.mo mom—510 w 2:8 mwmcoxopaamm 29 mm<mzcm Nooo fooo 000m fiooo woo 06mm U82 k5o moo >= 033 @2888 2:8 mm; >a<mam3® may woo So I 2m" 5023 A0 go 0.3mm U83 2663 ono o.mo 2m» U83 imam: o.om ooA ...
View Full Document

This note was uploaded on 04/07/2008 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

Page1 / 11

Lecture 6 Notes - Chapter 6 Reporting Sales Revenue...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online