Determine the uses of the Cash Receipts Journal and how it is structured internally using QuickBooks.
Explain the concept of Sales Discounts and how they are recorded in manual accounting and QuickBooks applying the Sales Discounts.
Explain the presentation of the multi- step Income Statement of a merchandising company depicting the Cost of Sales as a schedule, incorporating the use of the Periodic inventory system.
Enhance the knowledge on the differences in the presentation of the Profit and Loss Statement by QuickBooks when Perpetual or Periodic inventory system is used.
This is the final chapter discussion of the special-purpose journals used by merchandising companies. To increase the volume of sales transactions, businesses allow credit sales, but sales for cash are always a preference. Companies can choose to sell only to cash customers, but doing so will limit their sales volume and affect their growth in the industry. As a general rule, the ratio of a high inventory turnover will yield a greater profit for the business. Though cash sales transactions set their own boundaries, credit sales also have their disadvantages. As indicated in Chapter 8, losses on uncollectible accounts are always incurred no matter how tough the credit and collection policies are. Careful record keeping of customers’ accounts must be maintained as a check and balance to the Accounts Receivable general ledger. Collections of the Accounts Receivable must be properly accounted for to safeguard company assets and minimize unexpected costs.