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Net Sales definitions Flashcards

Net Sales definitions
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  • Net Sales
    Total revenue after subtracting sales discounts, sales returns, and sales allowances from gross sales.
  • Gross Sales
    Total sales revenue before any deductions for discounts, returns, or allowances.
  • Sales Discount
    Reduction in sales price offered to customers as an incentive for early payment within a specified period.
  • Contra Revenue Account
    Account with a debit balance used to reduce total revenue, such as sales discounts, returns, or allowances.
  • Sales Return
    Transaction where customers return goods, resulting in a reduction of both accounts receivable and revenue.
  • Sales Allowance
    Price reduction granted to customers who keep unsatisfactory goods, lowering the amount owed and revenue.
  • Accounts Receivable
    Asset account representing amounts owed by customers for goods or services sold on credit.
  • Gross Method
    Recording sales at full invoice amount, with discounts recognized only if taken by the customer upon payment.
  • Net Method
    Recording sales assuming all discounts will be taken, adjusting entries if customers forfeit the discount.
  • Sales Discounts Forfeited
    Revenue account capturing amounts from discounts not taken by customers who pay after the discount period.
  • Credit Terms
    Agreed-upon conditions specifying discount percentage, discount period, and final due date for payment.
  • Revenue
    Income earned from selling goods or services, recorded when the sale occurs, regardless of payment timing.
  • Debit
    Accounting entry that increases assets or contra revenue accounts and decreases liabilities or equity.
  • Credit
    Accounting entry that increases liabilities, equity, or revenue accounts and decreases assets.
  • Income Statement
    Financial report summarizing revenues and expenses to show net income or loss for a period.