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Cards In This Set
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Trade discount is a reduction from the list price which is used to?
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Give quantity discounts to customers disguise real prices from competitors Change prices without published a new catalog
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Loans by a company to other entities and interest due from loans to customers are known as?
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Receivables
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Average collection period is calculated by what equation?
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365/ receivable turnover ratio
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Trade Receivable
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The legal right to receive cash from a credit sale and represents a asset to a company
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Interest on a note calculation?
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Face amount x annual rate x fraction of annual period
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Receivables turnover formula?
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Net credit sales / average accounts receivables
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Joyce determines that a customer who owes 20000 should be written off as noncollectable. The write off would create a journal entry like?
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Debit allowance for uncollected accounts
Credit to accounts receivable |
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Sales discount is
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A reduction in the sales price if paid within a certain number of days
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Net Revenue is calculated as?
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Sales - discounts- returns - allowances
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Net Realizable Value Equation =
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Gross account receivable - allowance for doubtful account
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Account receivable are classified as current assets because?
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They will be converted to cash with 1 year or the normal operating cycle
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When a customer makes a return what would the journal entry look like?
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Debit to Sales returns Credit to accounts receivable
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