ACCT 2001 Chapter : Chapter 5 Accounting Notes
Document Summary
2/23/12 chapter 5: revenue expenses = net income, sales revenue cost of goods sold = gross profit expenses = net income. Gross profit margin: gross profit net sales. Profit margin: net income net sales. 5/4 bought equipment on account for : debit: inventory , credit: accounts payable . 5/8 return of equipment: debit: accounts payable , credit: inventory . 2/10 n/30: 2% discount if you pay within 10 days. If not, one must pay entire amount within 30 days: 2% of ,500 is . 5/14 payment you owe: debit: accounts payable ,500, credit: inventory , credit: cash ,430. It will be either the entry from 5/14 or 5/15 depending on when it is paid: debit: accounts payable ,500, credit: cash ,500. Fob = free on board: fob shipping point, buyer pays, fob destination, seller pays. Inventory: debits, purchase , freight , credit, return , discount .
