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BUSI 1001 (8)
Lecture

Chapter 4Oct.7.docx

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Department
Business
Course
BUSI 1001
Professor
Emily Gray
Semester
Fall

Description
Chapter 4: Sales Contra accounts: Contra account­ ex: accumulated depreciation  Sales – sales discounts (early payment discounts)               sales returns (merchandise returns)               sales allowances (customer keeps merchandise but is given a credit) Sales discounts: ­Discounts are given to customers for early payment of their accounts n/30= payment due 30 days from invoice date 1/20, n320 – deduct 1% of invoice  (NOT DONE) Sales discounts: Record sale:  Dr accounts receivable Cr sales When payment is received within discount period Dr cash Dr sales discounts Cr accounts receivable Ex: You just made a sale of 10,000, terms 2/10, n/30. You receive payment within 8days.  Accounts Receivable 10,000 Sales 10,000 Cash  9,800 Sales discount  200 Accounts receivable  10,000 Perpetual Inventory Systems:  Inventory is continually updated: inventory purchases and sales are recorded directly in  the inventory account  Periodic inventory system: Periodic system – inventory is counted att the end of each year  ­Inventory purchases are debited to the purchases account ­cost of goods sold is computer at year end  Periodic: Purchases contra accounts balances: Purchases dr Transportation in dr Purchase discounts cr Purchase returns cr Purchases allowances cr P
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