Summary: Accounting

Read the summary and the most important questions on Accounting

• 1 Hotel Revenue Accounting

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• 1.3 TRade discounts

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• List price €5000Discount 40%TRade discount amount =

  Trade discount amount = list price x trade discount
  = 5000 x 0.6 = 3000

• List price = €6000Reduction 8% Trade discount amount =

  TRade discount amount = list price x trade discount
  = 6000 x 0.92 = 5520

• List price = 4000Increase 10% = trade discount amount

  Trade discount amount = list price x trade discount
  = 4000 x 1.10 = 4400

• List price = 5000discount = 20%= NET PRICE

  List price x trade discount rate = trade discount amount
  List price - trade discount amount = NET PRICE

• 1.4 Cash discounts

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• Calculate the last day of dicount period and the end of  credit periodJuly  6 (date of invoice) , 2/10, N/30

  Invoice date July 
  Last day discount =  16 July
  End of the credit period: 30th August

• Invoice date: 19 FebruaryReceiving Of Goods date:  9 JuneTerms: 3/10, N/30 ROG

  Last discount day: 19 June
  End credit period: 9 July

• 1.5 Gross method

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• Gross method: Revenue procedurePurchase of $500 of uniforms: Invoice date: March 1, terms: 2/10, n/30

  Uniforms 500
  Account payable 500
  
  -----------------------------------------------
  
  Account payable 500
  Cash   490      
  Cash discount earned 10

• Gross method: Revenue procedurePurchase of $300 of uniforms: Invoice date: February 2, terms: 3/10, n/30

  Uniforms 300
  Account payable 300
  
  ----------------------------------------
  
  Account payable 300
  Cash  391
  Cash discount earned 9

• Gross method: Non Revenue procedurePurchase of $500 of uniforms: Invoice date: March 1, terms: 2/10, n/30

  Uniforms 500
  Account payable 500
  ------------------------------------------   
  Account payable 500
  Cash 490
  Uniforms 10

• NET METHODPurchase of $500 of uniforms: Invoice date: March 1, terms: 2/10, n/30 (discount taken)

   Uniforms 490
  Account payable 490
  
  Account payable 490
  Cash 490