Financial Accounting 10/3

What is the Sales returns and Allowances account

A reduction of sales revenues for return of or allowances for unsatisfactory goods.

What are net sales

The top line reported on income statement

How to calculate the net sales

Net sales=Sales Revenue-Sales Discounts- Sales return and allowances

What is FOB Shipping point

It’s when goods are shipped, and title changes hands at shipment and the buyer normally pays for shipping.

On January 1, goods were picked up by Fed-up Delivery, Inc. The goods arrived at the customer's place of business on January 12. If the seller recorded the sale on January 1, then the terms must have been FOB ____.

Shipping Point

When goods are shipped to ____. Title changes hands on delivery, and the seller normally pays for shipping.

FOB destination

A company must disclose the revenue recognition rule they follow Blank______

in the footnote called Summary of Significant Accounting Policies

What does the sales discount term 1/7, n/30 indicate?

You can take a 1% discount if you pay within 7 days, or the full amount is due within 30 days

Companies disclose the revenue recognition rule they follow in the footnote to the financial statements entitled _______

Summary of Significant Accounting Policies.

Allowing credit cards, returns or discounts for early payment affects the recording of Blank______.

net sales revenue

ABC Corp. aims to shorten its cash collection period by accepting national credit card payments instead of offering direct credit to customers. What is the drawback of this approach?

Credit card companies charge fees that reduce profits.

Which of the following strategies can companies use to drive sales and collections?

Provide discounts for early collection,Allow customers to purchase on credit