ACCT 201 Study Guide - Midterm Guide: Earnings Before Interest And Taxes, Intangible Asset, Accounts Payable
Document Summary
Chapter 5: receivables and sales: sales on account, sales to customers from products or services without cash are credit sales or sales on account. The customer has an amount of money to pay the business: businesses are willing to wait to get money because some people cannot always afford the full cost of a product or service right away. Good news more customers if businesses are willing to wait on being paid. Bad news not everybody is going to pay: adjustments to sales amounts, trade discounts (usually discounts given to good customers . An example of this is the discount that subway gives to loyola students) Example: original price of something is , but the company gives the customer at trade discount and customer gets it on account. Accounts receivable is going to be debited 95 because the trade discount is subtracted from the in the journal entry.
