Explain the recording of Sales Revenue under the perpetual and periodic inventory systems, including Sales Returns & Allowances.
Use Sage 50 to create and set up customer accounts with the terms of sale.
Explain the concept of writing off bad debts in manual accounting under the allowance method and the direct write-off method.
Determine the journal entries needed for taxable sales items and explain the method used in actual practice to facilitate the recording process without the necessary adjusting entries.
The previous two chapters have focused on acquiring inventory on account and recording cash payments. To continue the discussion on accounting in a merchandising company, this chapter will focus on accounting for sales. Sage 50 is used to establish the selling price of the inventory and set up the sales tax rate where applicable. Then, the seller transfers title of the inventory to the buyer in exchange for cash or a promise to pay at a future date. Although most retail companies prefer cash sales, selling on account or on credit will help increase the volume of sales.