ACTG 2200 Chapter Notes - Chapter 5: Income Statement, Accounts Receivable

• School: University of Denver
• Department: Accounting
• Course: ACTG 2200
• Professor: Hallam Andrew

Document Summary

Recognizing accounts receivable: credit sales and accounts receivable. Credit sales: transfer products and services to a customer today while bearing the risk of collecting payment in the future. Refer to a company"s total revenues less any amounts for discounts, returns, and allowances: trade discounts. Represent a reduction in the listed price, typically used to provide incentives to larger customers. Change prices without publishing a new price list, or disguise real prices from competitors. Sale @ discounted price: sales returns and allowances. After a sales return we (a) reduce the customer"s account balance if the sale was on account or (b) we issue a cash refund if the sale was in cash. Sales allowance: seller reduces customer"s balance owed to provide at least a partial refund. Contra-revenue account: account with a balance that is opposite to that of its related account (sales discounts, sales returns, sales allowances)