Posted on February 10, 2010 by admin
When merchandise is purchased for resale to customers, the temporary account, Merchandise Purchases, or simply Purchases, is debited for the cost of the goods. Thus, Larry Martin, as manager of the Washington State University Bookstore, would debit Purchases for books purchased for resale to students. However, not all purchases are debited to Purchases. Purchases of [...]
Selengkapnya...
Posted on January 29, 2010 by admin
The terms of a credit sale may include an offer of a cash discount, called a sales discount, to the customer for prompt payment of the balance due. This incentive offers advantages to both parties: The purchaser saves money, and the seller is able to convert the accounts receivable into cash earlier.
The credit terms specify [...]
Posted on January 20, 2010 by admin
Sales revenue less cost of goods sold is called gross profit (or gross margin) on sales. For example, when a pocket calculator costing $15 is sold for $25, the gross profit is $10. Merchandising companies customarily report gross profit on sales in the income statement.
After gross profit is calculated, operating expenses are deducted to determine [...]
Posted on January 8, 2010 by admin
Listed first in the liabilities and owner’s equity section of the balance sheet are current liabilities. Current liabilities are obligations that are reasonably expected to be paid from existing current assets or through the creation of other current liabilities. As in the case of current assets, the time period for payment is one year or [...]
Selengkapnya...
Posted on December 26, 2009 by admin
Current assets are cash and other resources that are reasonably expected to be realized in cash or sold or consumed in the business within one year of the balance sheet date or the company’s operating cycle, whichever is longer. For example, accounts receivable are included in current assets because they will be realized in cash [...]
Selengkapnya...
Posted on December 17, 2009 by admin
The post-closing trial balance is prepared from the permanent accounts in the ledger. The permanent accounts of Pioneer Advertising are shown in the general ledger in Illustration 4-10. Remember that the balance of each permanent account is computed after every posting. Therefore, no additional work on these accounts is needed as part of the closing [...]
Selengkapnya...
