Gross sales vs net sales: Key differences explained
This is where reviewing net sales alongside gross sales comes in handy. From damaged goods to late deliveries, customers can decide to send the product back for a variety of reasons, and as long as they’re in line with your return agreement, they can request a refund. As all the deductions have to be made […]
Journal Entry for Profit on Sale of Fixed Assets
Recall that revenue is earnings a business generates by selling products and/or services to customers in the course of normal business operations. That is, earnings result from the business doing what it was set up to do operationally, such as a dry cleaning business cleaning customers’ clothes. A gain is different in that it results […]
What are gross sales?
You can also use net sales to set meaningful goals for your sales team. Determine how much more revenue your company needs to hit sales targets, and set realistic quotas for reps based on those metrics. It also lets a company hold customers accountable for the state of products they return, the pace at which […]
What is a Debit Memo: Types, Uses and Examples
Seller issues a debit memo and debits Accounts Receivable to increase a buyer’s debt obligations, for example when incrementally increasing a previously invoiced amount due to a clerical error or price change. Alternatively, buyers can send debit memos to sellers if they return the goods or services. For example, a purchase return is where a […]
Accounting Methods for Construction Contracts
This could cause a massive impact on the business’ working capital and cash flow. A company is hired to construct a building in which the company will charge the customer $2 million, and the project will take two years to complete. The company establishes milestones in which the customer will pay $500,000 or 25% of […]