Merchandising operations - Sales

6 important questions on Merchandising operations - Sales

When is revenue realized for a merchandiser?

Upon delivery to the customer

What is the second journal entry that is made each time a merchandiser sells an item?

Debit COGS and credit inventory

How do sellers deal with sales discounts?

The sale is recorded at gross amount so that any discount can be easily seen and tracked.
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How does a seller treat delivery charges?

They are expensed, and never part of COGS.

How are sales taxes handled by a seller?

The portion that goes to taxes is debited as part of the total cash collected.  The tax part is credited to Sales Taxes Payable, never included with Sales.

What does a special journal do?

Special journals record very large numbers of routine transactions, such as sales a a cash register.

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