My Boutique
Apply the revenue principle to determine appropriate
time to record sales revenue.
Rendering of Services
Credit Sales
Example:
Sales XX
Less: Trade discount(XX)
sales returns (XX)
Net sales XX
Less: COGS (XX)
Gross profit XX
(B) Cash discount
A selling expense incurred by seller if the customers pay the
amount within a specified period of time. For example, terms of
"1/10, n/30" indicates that the credit term is 30 days but the buyer
can deduct 1% of the amount owed if the customer pays the
amount owed within 10 days.
Example:
Sales XX
Less: COGS (XX)
Gross profit XX
Less: Expenses
Cash discounts (XX)
Other expenses (XX) XX
Net profit XX
• Customer have a right to return
unsatisfactory or damaged
merchandise and receive a refund or
an adjustment to their bill.
Dr Cr
11 Jan 09 Cash S$3,500
Sales S$3,500
(Being sale of 10 watches)
Credit sales
On 9 Jan, sold 10 evening gowns to Glamour Media Pte Ltd for S$4,500 on
credit, terms 5/10, net 30.
Dr Cr
Render of Services
On 8 January, a fee of S$50 was charged for the delivery of goods.
Dr Cr