COMMERCE 1AA3 Chapter Notes - Chapter 6: Net Income, Gross Profit, Combined Gas And Steam
8 Dec 2016
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This is recorded so that we understand the decrease in inventory. Gross profit: total revenue before expenses negative gross profit = rip. Sales discounts (cash discounts): discounts given to customers to encourage early payment. Income from operations (operation income) = gross profit operating expenses. Income from continuing operations = operating income other expenses + other revenue: operating income is persistent good for predictive ability, so it is recorded in its own step. Net income = income from continuing operations -/+ irregular items. Is an asset held for resale or used to produce services an goods for sale. Recorded at the price paid plus all costs incurred to get an asset ready for its use, including: When customers are sold damaged merchandise, they can either: return the merchandise and receive full refund: sales return. To the customers its purchase return: keep the merchandise, but receive some credit (either reduction in a/r, store credit or cash).
