Our sales revenue can be reduced by certain transactions, such as discounts and merchandise returns.

Concept #1: Net Sales: Sales Discounts (Gross Method)

Please note: Most students will not need to learn the net method for sales discounts in this class. Double check if your class covers the net method for sales discounts!

Concept #2: Net Sales: Sales Discounts (Net Method)

Concept #3: Net Sales: Sales Discount Forfeited (Gross Method)

Please note: Most students will not need to learn the net method for sales discounts in this class. Double check if your class covers the net method for sales discounts!

Concept #4: Net Sales: Sales Discount Forfeited (Net Method)

Concept #5: Net Sales: Sales Returns

Concept #6: Net Sales: Sales Allowances

Additional Problems
Credit card discounts are reported on the income statement as: a. a contra revenue. b. a contra asset. c. a selling expense. d. both (A) and (C).
You received an invoice that shows credit terms of 2/10, n/60. What does the number 10 in the credit terms refer to? a. the number of days in the credit period. b. the amount of sales discount available. c. the number of days in the discount period. d. the amount of the trade discount.
A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600. The amount charged to the customer's account receivable was: a. $612.00. b. $600.00. c. $588.00. d. $601.20.
All of the following are contra revenue accounts except: a. Sales discounts b. Credit card discounts c. Accumulated depreciation d. Sales returns and allowances
By treating sales returns and allowances, sales discounts, and credit card discounts as contra-revenues, we have the following impact a. Gross margin is reduced by sales returns and allowances, sales discounts and credit card discounts b. Gross margin is increased by sales returns and allowances, sales discounts and credit card discounts c. Gross margin is unchanged by sales returns and allowances, sales discounts and credit card discounts d. None of the above is correct
Cainas Cookies places an order with Publix for ingredients on 10/29 for $300. Publix ships these on 10/31 and they arrive on 11/2, terms 1/10, n/30, FOB shipping point. Cainas pays for these on 11/5. What entry should Publix make on 11/5 when it receives payment? a. Debit: Cash $300 and Credit: A/R $300 b. Debit: Cash: $300 and Credit: Purchase Discounts $3 and A/P $297 c. Debit: Cash $297 and Sales Discounts $3 and Credit: A/R $300 d. Debit: Cash $300 and Credit: Inventory $300
Which account listed below is classified as a contra-revenue account? a. Cost of Goods Sold. b. Gross profit c. Sales Discounts d. Purchases.
Net sales includes sales and a. Sales returns b. Sales discounts c. Sales allowances d.  All of the above