Why are contra-revenue accounts used rather than directly deducting from the Sales Revenue account?
Answer to relevant QuestionsWhat is gross profit? How is the gross profit percentage computed? Illustrate its calculation and interpretation assuming Net Sales is $ 100,000 and Cost of Goods Sold is $ 60,000. What is the difference between FOB shipping point and FOB destination? How do these terms relate to the revenue principle? Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $ 2,400; Cost of Goods Sold, $ 22,728; Income Tax Expense, $ 3,000; ...Assume Anderson’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $ 23,000. If the company was charged $ 650 in transportation cost by National Trucking, immediately returned ...Using the information in E6-12, prepare journal entries to record the transactions, assuming Soli-tare uses a perpetual inventory system. Info E6-12 Jan. 6 Sold goods for $ 100 to Wizard Inc. with terms 2/10, n/30. The goods ...
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