Vocab
Accrual-basis accounting recognizes revenue when it is
Earned/Realized/Realizable
If payment is received within the discount period, then sales discounts (2/10, N30) is ______
debited
Net Sales = Sales Revenue - ____
Sales returns and allowances
"2/10, Net 30" is an example of
a. sales discounts
b. sales returns/allowances
A
If Blue Bunny sells Walmart $5,500 worth of ice cream at 2/10, N30, what will the journal entry look like if Walmart pays within the discount period?
Cash 5390
Sales Discounts 110
Accounts Receivable 5000
Paramount bills Netflix $3480 for the month for using their movies. They offer them a 2/10, N30 discount. What will it look like if Netflix pays after the discount period?
Cash 3480
Accounts Receivable 3480
Sales returns and allowances are a contra-
revenue account
If Blue Bunny sells Walmart $5,500 worth of ice cream at 2/10, N30, what will the journal entry look like if Walmart pays after the discount period?
Cash 5500
Accounts Receivable 5500
Paramount bills Netflix $3480 for the month for using their movies. They offer them a 2/10, N30 discount. What will it look like if Netflix pays within the discount period?
Cash 3410.40
Sales Discounts 69.6
Accounts Receivable 3480
Why is the direct write-off method not GAAP?
It violates the matching principle
If there are total credit sales of $846,000 and there are 6% likely to default, what is the estimated bad debt expense?
50,760
What does the journal entry look like when a customer uses a Visa credit card to pay for Squid Games spoilers from kissdrama for $45 with a 1.77% service charge?
Cash 44.2
Service Charge Expense .80
Sales Revenue 45
_____ are receivables that generally specify an interest rate and maturity date at which any interest and principal must be repaid.
Note
Advertising for Black Widow purchases an 8%, 3 months, $12,000 note from YouTube on September 30th. What is the journal entry for December 31?
Interest Receivable 160
Interest Income 160
Advertising for Black Widow purchases an 8%, 3 months, $12,000 note from YouTube on September 30th. What is the total interest income on the note?
240