ACCT 1201 Chapter Notes - Chapter 6: Bank Statement
26 Jan 2015
School
Department
Course
Professor
Document Summary
Ch. 6 reporting and interpreting sales revenue, receivables, and cash . Sales revenue: fob (free on board) shipping point. Ownership switches when merchandise arrives at the shipping point: fob destination. The seller owns the merchandise until it arrives at the buyer. Credit card sales: increase customer traffic, avoiding the cost of providing credit directly to consumers, lowering losses due to bad checks, avoiding losses from fraudulent credit card sales, receiving money faster, credit card discount (contra-revenue) Fee charges by the credit card company for its services. Cash discount offered to encourage prompt payment of an account receivable. Reduces the necessity to borrow money to meet operating needs. Decreases the chances that the customer will run out of funds before bill is paid. Net (net sales returns) is due in 30 days. Sales returns and allowances: sales returns and allowances (contra-revenue) A reduction of sales revenues for return of or allowances for unsatisfying goods.
