财务会计精品课件Libby6e_Chapter_06S.pptVIP

LEARNING OBJECTIVES 1. Apply the revenue principle to determine the accepted time to record sales revenue for typical retailers, wholesalers,manufacturers, and service companies. 2. Analyze the impact of credit card sales, sales discounts, and sales returns on the amounts reported as net sales. 3. Analyze and interpret the gross profit percentage. 4. Estimate, report, and evaluate the effects of uncollectible accounts receivable (bad debts) on financial statements. 5. Analyze and interpret the accounts receivable turnover ratio and the effects of accounts receivable on cash flows. 6. Report, control, and safeguard cash. FOCUS COMPANY: Deckers Outdoor Corporation Learning Objective 1 the revenue principle requires: that revenues be recorded when they are earned (delivery has occurred or services have been rendered, there is persuasive evidence of an arrangement for customer payment, the price is fixed or determinable, and collection is reasonably assured). The point at which title (ownership) changes hands is determined by the shipping terms in the sales contract. When goods are shipped FOB (free on board) shipping point, title changes hands at shipment, and the buyer normally pays for shipping. When they are shipped FOB destination, title changes hands on delivery, and the seller normally pays for shipping. Revenues from goods shipped FOB shipping point are normally recognized at shipment. Revenues from goods shipped FOB delivery are normally recognized at delivery. The appropriate amount of revenue to record is the cash equivalent sales price. Deckers uses a variety of methods to motivate both groups of customers to buy its products and make payment for their purchases. The principal methods include (1) allowing consumers to use credit cards to pay for purchases, (2) providing business customers direct credit and discounts for early payment, and (3) allowing returns from all customers under certain circumstances. These methods, in turn, affect the way