BU127 Chapter Notes - Chapter 7: Abbreviation, Cash Management, Bank Reconciliation
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BU127 Full Course Notes
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Document Summary
Reporting and interpreting sales, revenue, receivables and cash. Title and ownership risks change hand at shipment. In exchange for cash or credit card. Credit card discount: fee charged by the credit card company for it"s services. Cash discount: incentive to encourage prompt payment of a payment receivable. Means: 2% discount if paid before 10 days and the net amount due 30 days after. Fast cash receipt means not borrowing to cover operating costs. Sales revenue - credit card discount = net sales. Sales revenue - sales discount = net sales. Reduction of gross sales revenues for returns or allowance for unsatisfactory goods. Credit card discounts, sales discounts and returns are accounted separately and all discounted from sales revenue. How effective is management at selling goods and services for more than production costs. How much profit is generated by every sales dollar. Trade receivables: accounts owed to the business due to credit sales of merchandise.
