AEM 2210 Study Guide - Midterm Guide: Uptodate, Market Price, Bank Statement

• School: Cornell University
• Department: Applied Economics & Management
• Course: AEM 2210
• Professor: Zeshawn Beg

Document Summary

6: reporting and interpreting sales revenue, receivables, and cash: Revenue recognition principle: revenues must be recorded when the company transfers goods and services to customers, in the amount it expects to receive. The only appropriate revenue to record is what is expected. Fob shipping point: title changes hands at shipment, buyer usually covers shipping costs. Fob destination: title changes hands on delivery, seller usually covers shipping cost. Credit card discount: fees charged by credit card companies that are subtracted from sales revenue. Company may allow a discount to business purchasers to encourage early payment: 2/10 n/30 means the customer will get a 2% discount if paid within 10 days with the full amount of the invoice (no discount) due within 30 days. Sales discounts are recorded by subtracting the discount from sales if payment is made within the discount period. Sales returns and allowances: must be deducted from gross sales revenue in determining net sales.