Question

1. What is cost of good sold? Where do you find ir in the income statement?

2. What kind of accounts are return and allowance?

3. What is fright out and what is fright in? Where would you find it in the income statements?

4. What would you find in the journal entry?

5. What are sells discount and purchase discount? Where is it in the income statement?

Answer 1

1. The expense of merchandise sold (COGS) is any immediate cost identified with the creation of products that are sold or the expense of stock you gain to pitch to buyers.

it is find in the income statement beneath the sales/ revenue & before the gross profit of the company.

2. Returns and allowance are two particular business money related exchanges that get recorded on one line of an organization pay articulation. "Returns" is the estimation of the stock clients bring back after buy and "remittances" is the measure of rebates you provide for disappointed clients.

These accounts are nominal in nature.

3.

Freight out is the cost related to delivery of goods paud by the seller. It is treated as selling expense and deducted from gross profit to calculate net profit.

frieght in is the delivery cost linked with purchase of the goods received from supplier. Is is the part of cost of purchases & hence deducted while calculating gross profit in the income statement.

4. Journal is a book kept to record & effect all the accounting entries in the books of accounts. It records each aspect of transaction as in what is the amount , date of transaction , from whom it is being done etc. It gives double effect to an entry debiting one account and crediting the other.

5. purchase discount is the discount offered to buyer of the goods following certain conditions which can be paying due amount before hand or within the time allowed based on the agreement between buyer & seller. It is reduced from the debite balance of purchase account as it is credited in the journal ledger account.

sale discount is the discount affered by the seller of the goods/ services stating a reduction in price of the goods sold/ services offered.

it is reduced from the gross sales in the income statement to calculate the net sales of the organisation.