MGCR 211 Lecture Notes - Lecture 10: Gross Margin, Cash Flow
12 Oct 2016
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Disadvantage to company: expenses and loss of control. Used by company with weak or insufficient credit history. July 17: receive an order for 1000 copies of a book for each. August 12: deliver the books and send bill for per book, offering 2/10 n/30 terms, cost of each book to the store is . December 18: receive 60 books that were returned for full cash refund. Gross revenue (40,000) sales returns (2,400) = net sales (36,600) Single step: all expenses (except interest and income taxes) grouped together. Transactions that do not involve the normal sale of goods or services. Interest income or expense, gain or loss on sale of capital assets, investment income from investing in other companies. Not specific guidelines on what should be presented where for operating/non-operating. Interest revenue/expense: reflects the costs of a company"s borrowings. Sometimes companies record a net figure, reflecting interest expense and interest income from invested funds.
