CH4 Returns, Discounts, and Payroll
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11 Terms
What is the journal entry for a Sales return?
Dr Sales Cr Cash/Trade Receivable
What is the journal entry for a Purchases return?
Dr Cash/Trade Receivable Cr Purchases
What is a Trade Discount?
A discount offered at the point of sale and journaled with the discounted price.
What is an Early Settlement Discount?
A discount given on a condition. It is accounted for in the journal based on whether or not you believe you/the customer will fulfil the condition.
For an expected Early Settlement Purchase, what is the journal entry?
Dr Purchase (Discounted Price) Cr Trade Payable (Discounted Price)
Should you not fulfil the discount conditions, what is the journal entry?
Dr Payable (Discounted price) Cr Cash (Full Price) Dr Purchases (Full Price - Discounted Price)
For an unexpected Early Settlement Purchase, what is the journal entry?
Dr Purchase (Full price) Cr Trade Payables (Full price)
Should you unexpectedly fulfil the discount conditions, what is the journal entry?
Dr Payables (Full price) Cr Cash (Discounted price) Cr Purchases (Full price - discounted price)
What is the total staff costs formula?
Gross salaries + Employer NIC
What is the payroll journal entry?
Dr Wages and Salaries (Gross Salary + Employer NIC)
Cr Cash (Net salary paid to the employee)
Cr Income Tax Payable (PAYE + Employer NIC + Employee NIC)
In what financial statement does income tax payable show up?
The SFP under Current Liability.