Job Sheet #2 Practice in Sales and Sales Related Transactions

ANALYZE.COMPUTE.WRITE

09.14.16

According to Win Ballada, a CPA and MBA, sales returns and allowances is about the buyers which maybe dissatisfied with the merchandise because the goods are damaged or defective, of inferior quality or not in accordance with their specifications which are permitted to return the goods and the seller may just grant an allowance or deduction from the selling price. It is recorded as a debit to an account. It is recorded as purchase returns and allowances in the seller's book. She also said that cash discounts are discounts for prompt payment and it is composed of purchase discount and sales discount. Sales discount is a cash discount from the seller's point of view, a contra-income account and deducted from gross sales in the income statement. It has a discount period which means it is the period covered by the discount.