Chapter 11 - Introduction to merchandising businesses: Sales. After completing this chapter, students will be able to: Describe the difference between cash, charge account, and credit card sales; compute sales tax; use credit terms; compute the cash discount and amount of payment due on an invoice; apply the procedure for handling sales returns and allowances. | CHAPTER ELEVEN INTRODUCTION TO MERCHANDISING BUSINESSES: SALES 1. Describe the difference between cash, charge account, and credit card sales. 2. Compute sales tax. 3. Use credit terms. 4. Compute the cash discount and amount of payment due on an invoice. 5. Apply the procedure for handling sales returns and allowances. INTRODUCTION TO MERCHANDISING BUSINESSES: SALES Objectives: 11- Selling at Retail Cash Sales Charge Sales Credit Card Sales Sales Tax 11- Selling at Wholesale Most selling at the wholesale level is done on credit through the use of invoices. 11- Credit Terms Credit terms listed on the invoice tell when the customer must pay for the goods. 11- Credit Terms 2/10, n/30 means: A cash discount of 2% is allowed if paid within 10 days. If not, the balance is due within 30 days. 11- Sales Returns and Allowances Sometimes a customer will return merchandise or request an allowance. The procedure for handling returns and allowances on credit sales involves | CHAPTER ELEVEN INTRODUCTION TO MERCHANDISING BUSINESSES: SALES 1. Describe the difference between cash, charge account, and credit card sales. 2. Compute sales tax. 3. Use credit terms. 4. Compute the cash discount and amount of payment due on an invoice. 5. Apply the procedure for handling sales returns and allowances. INTRODUCTION TO MERCHANDISING BUSINESSES: SALES Objectives: 11- Selling at Retail Cash Sales Charge Sales Credit Card Sales Sales Tax 11- Selling at Wholesale Most selling at the wholesale level is done on credit through the use of invoices. 11- Credit Terms Credit terms listed on the invoice tell when the customer must pay for the goods. 11- Credit Terms 2/10, n/30 means: A cash discount of 2% is allowed if paid within 10 days. If not, the balance is due within 30 days. 11- Sales Returns and Allowances Sometimes a customer will return merchandise or request an allowance. The procedure for handling returns and allowances on credit sales involves the use of a credit memorandum or credit slip listing the details of the credit 11- Accounting Terminology Allowance Cash discount Charge accounts Credit cards Credit memorandum Inventory Invoice Merchandise Merchandising business Retailers Sales returns and allowances Sales slip Sales tax Source documents Statement of account Wholesalers 11- Chapter Summary A merchandising business earns its revenue by selling merchandise (goods) that it has purchased. Merchandising businesses are usually either wholesalers or retailers. 11- Chapter Summary (continued) Some retailers sell only for cash, and others sell both for cash and on credit. Charge accounts and credit cards are two common types of credit used in retail stores. Wholesalers make most of their sales on credit. 11- Chapter Summary (continued) When sales are made, merchandising businesses must record information about them on source documents. Retailers prepare cash register tapes and sales slips. Wholesalers prepare
