Accounting Test Chapter 6

Front 1

2/10, n/30

Back 1

discount percentage, # of days in discount period, net (total sales less returns), Maximum days in credit period

Front 2

interest rate for 20 days=
annual interest rate=

Back 2

amount saved/amount paid

365 days/20days * percentage

Front 3

reporting net sales

Back 3

Sales revenue
Less: Credit card discounts
Sales discounts
Sales returns and allowances
______________________________________
net sales

Front 4

gross profit percentage=

Back 4

gross profit/net sales

Front 5

bad debts

Back 5

result from credit customers who won't pay, it's matched with the sales revenue in the same period. most business estimate it.

Front 6

bad debt

Back 6

bad debt expense. determine the desired balance in the allowance for doubtful accounts. accounts are aged by breaking down the balance by showing the age in balance

Front 7

receivables turnover=

Back 7

net sales/ average net trade receivables

Front 8

average collection period=

Back 8

365/ receivables turnover