( سمستر دوم ) ( ۱ ) اصول حسابداری Accounting Principles II

مطالب این بخش بیشترآ در بر گیرنده تعاریف و موضوعات خارج از سلاید های تدریس  

شده استاد صفدر می باشد که جهت سهولت بیشتر و درک بهتر ثبت معاملات تجاری  

 - برای علاقمندان تهیه شده است 

 

What 's Discount ?  

Types of discounts and allowances

The most common types of discounts and allowances are:

• Cash discounts for prompt payment - These are intended to speed payment and thereby provide liquidity to the firm. They are sometimes used as a promotional device. Examples are:
  • 2/10 net 30 - this means the buyer must pay within 30 days of the invoice date, but will receive a 2% discount if they pay within 10 days of the invoice date.
  • 3/7 EOM - this means the buyer will receive a cash discount of 3% if the bill is paid within 7 days after the end of the month indicated on the invoice date. It should be noted that if an invoice is received on or before the 25th day of the month, payment is due on the 7th day of the next calendar month. If a proper invoice is received after the 25th day of the month, payment is due on the 7th day of the second calendar month.
  • 3/7 EOM net 30 - this means the buyer must pay within 30 days of the invoice date, but will receive a 3% discount if they pay within 7 days after the end of the month indicated on the invoice date. It should be noted that if an invoice is received on or before the 25th day of the month, payment is due on the 7th day of the next calendar month. If a proper invoice is received after the 25th day of the month, payment is due on the 7th day of the second calendar month.
  • 2/15 net 40 ROG - this means the buyer must pay within 40 days of receipt of goods, but will receive a 2% discount if paid in 15 days of the receipt of goods by the purchaser. (ROG is short for "Receipt of goods.")
• Cash discounts for preferred payment method - Some retailers (particularly small retailers with low margins) offer discounts to customers paying with cash, to avoid paying fees on credit card transactions.
• Quantity discounts - These are price reductions given for large purchases. The rationale behind them is to obtain economies of scale and pass some (or all) of these savings on to the customer. In some industries, buyer groups and co-ops have formed to take advantage of these discounts. Generally there are two types:
  • Cumulative quantity discounts (also called accumulation discounts). These are price reductions based on the quantity purchased over a set period of time. The expectation is that they will impose an implied switching cost and thereby bond the purchaser to the seller.
  • Non-cumulative quantity discounts. These are price reductions based on the quantity of a single order. The expectation is that they will encourage larger orders, thus reducing billing, order filling, shipping, and sales personal expenses.
• Trade discounts (also called functional discounts) - These are payments to distribution channel members for performing some function. Examples of these functions are warehousing and shelf stocking. Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked. Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).

• Partial payment discounts - Similar to the Trade discount, this is used when the seller wishes to improve cash flow or liquidity, but finds that the buyer typically is unable to meet the desired discount deadline. A partial discount for whatever payment the buyer makes helps the seller's cash flow partially.
• Seasonal discounts - These are price reductions given when an order is placed in a slack period (example: purchasing skis in April in the northern hemisphere, or in September in the southern hemisphere). On a shorter time scale, a happy hour may fall in this category. Generally, this discount is referred to as "X-Dating" or "Ex-Dating". An example of X-Dating would be:
  • 3/7 net 30 extra 10 - this means the buyer must pay within 30 days of the invoice date, but will receive a 3% discount if they pay within 7 days after the end of the month indicated on the invoice date plus an extra 10 days.^[5]

• Forward dating - This is where the purchaser doesn’t pay for the goods until well after they arrive. The date on the invoice is moved forward - example: purchase goods in November for sale during the December holiday season, but the payment date on the invoice is January 7th.
• Promotional allowances - These are price reductions given to the buyer for performing some promotional activity. These include an allowance for creating and maintaining an in-store display or a co-op advertising allowance.
• Brokerage allowance - From the point of view of the manufacturer, any brokerage fee paid is similar to a promotional allowance. It is usually based on a percentage of the sales generated by the broker.
• Trade-ins - This can be a way of reducing the price. By offering more for a trade-in than it is actually worth, the net effect is to reduce the effective price earned by the seller. The advantage of this is it encourages replacement sales without altering the list price or the perceived value.
• Coupons - A discount, either of a certain specified amount or a percentage to the holder of a voucher. Coupons can be distributed in places like newspapers, brochures, and the internet.
• Rebates - A refund of part of sometimes the full price of the product following purchase, though some rebates are offered at the time of purchase.
• Military discount - A discount offered to customer's who are or were enlisted in military services.
• Senior discount - A discount offered to a customer who has reached a certain age, which depending on the type of business or setting, may vary. Similar discounts in some settings may be offered to those with disabilities, regardless of age.
• Child/Toddler discount - A discount offered to a customer or child of a certain age or younger. (E.g. Kids eat free.)
• Sliding scale - A discount offered based on one's ability to pay. More common with non-profit organizations than with for-profit retail.
• Trade rate - A discount offered by a seller to a buyer in a related industry. For example, a pharmacist might offer a discount for over-the-counter drugs to physicians who are purchasing them for dispensing to the physicians' own patients.

• Bargaining - Where the seller and the buyer negotiate a price, which the buyer hopes is lower than the marked price.   
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• Closing Entries :

  n    Resets revenue, expense and withdrawal account balances to zero at the end of the period.

  n    Helps summarize a period’s revenues and expenses in the Income Summary account.

  Closing process:

  1 - Identify accounts for closing.

  2 - Record and post closing entries.

  3 - Prepare post-closing trial balance.

  Closing process only applies on Temporary Accounts.

  1 - Temporary Accounts ( Revenue , Expenses , Withdrawals and Income Summary)

  2  - Permanent Accounts : ( Assets , Liabilities and Owner's Capital

  Close:

  1 – Revenues and Expenses to the Income Summary ( to find and balance of  loss or profit ) then,

  2 – Income Summary ( result of it =  profit or loss ) to Owner's Capital

  3 – Withdrawals  to Owner's Capital

   ( WE SHOULD CLOSE ENTRIES FROM AN ADJUSTED TRIAL BALANCE)

  Note :

  The Balance of Income Summary equals to Net Income/Lose !

  Post – Closing Trial Balance :

  n       List of permanent accounts and their balances after posting closing entries.

  n       Total debits and credits must be equal.

  Classified Balance Sheet :

  Assets = Liabilities + Owner's Capital

  Assets :                                      Liabilities & Equity

  Current Assets                           Current Liabilities

  Non-Current Assets                    Non-Current Liablities

  Long-Term Investments             Owner's Capital

  Plant Assets

  Intangible Assets

  Merchandising Activities:

  Merchandising Companies are :

  Manufacturer – Wholesaler– Retailer – Customer

  Income of a Merchandiser = Net Sales – C.G.S = Gross Profit – Expenses = Net Income

  Operating Cycle for Merchandiser :

  1 – Cash Sales : Purchases – Merchandise Inventory –Cash Sales .

  2 – Credit Sales : Purchases – Merchandise Inventory – Credit Sales – Accounts Receivable.

  Inventory System:

  Beginning Inventory + Net Cost of Purchases = Merchandise Available for Sale.(Currently Available )

  At the end :

  Ending Inventory + C.G.S = Merchandise Available for Sale. (For next period)

  Income Statement Formats

  1 – Multiple – Steps: ( With details )

  Sales Less : Sales Discounts and Sales Returns = Net Sales , then ;

  Net Sales Minus CGS = Gross Profit , then ;

  Gross Profit – Operating Expenses = Net Income !

  2 – Single – Steps: ( Briefly

  Net Sales – CGS & Operating Expenses = Net Income)

  Partnership Characteristics:

  Voluntary Association ,  Partnership Agreements , Limited Life , Taxation , Mutual Agency ,  Co-Ownership of Property , Unlimited Liability .

  Organizations with partnership Characteristics or Types of Partnership : 

  L.P ( Limited Partnership ) :

  ·         General partners assume management duties and unlimited liability for partnership debts.

  ·         Limited partners have no personal liability beyond invested amounts.

  L.L.P  ( Limited Liability Partnerships ) :

  ·        Protects innocent partners from malpractice or negligence claims.

  ·        Most states hold all partners personally liable for partnership debts.  

   L.L.C  ( Limited Liability  Corporations ) :

  •          Owners have same limited liability feature as owners of a corporation.

  •          A limited liability corporation typically has a limited life.

  Organizing a Partnership:

  Partners can invest both assets and liabilities in the partnership.

  Assets and liabilities are recorded at an agreed-upon value, normally fair market value.

  Asset contributions increase the partner’s capital account.

  Withdrawals from the partnership decrease the partner’s capital account.

  Dividing or Allocation of Incomes among the Partners :

  Partners are not employees of the partnership but are its owners. This means there are no salaries reported as expense on the income statement. Profits or losses of the partnership are divided on some agreed upon ratio.

  Three frequently used methods to divide income or loss are allocation on:

  1.      Stated ratios.

  2.      Capital balances.

  3.      Services, capital and stated ratios.

  ·        Allocation Based on Stated Ratio :  As it is named , the Ratio for allocation or distribution of profits at the end of  a business activity is Stated at the starting of Partnership and will appear on agreements.

  Example :   Ahmad and Omer  started a business like partners , with equal amounts of investments ; but they agreed to distribute the net income as  follow :

  Suppose they profited 3000.

  2/3  to Ahmad ( 2 part of the 3000 which will be 2000)

  1/3 to Omer ( 1 part of the 3000 , which will become 1000 )

  NOTE : In this kind of Profit Allocation , just the  Ratio agreed and Stated is important , with out considering the difference in investment of partners.

  ·         Allocation Based on Capital Balance:  The  Net profits are distributed according to the  volume  or amount of investment of partners – the partners will receive the that percentage of the profit , same as the percentage of his/her investment ( Capital )

  Pretend , Ahmad  shared 5000 and Omer 10000  at the beginning of their business , and they agreed  to distribute the profits , based  on the Capital .( or the percentage of Amount each has shared or invested to the business . )

  If the business results to 1500 profit at the end , it should be distribute for partners as follow :

  First we should know , each partners'   percentage of their  capital ,  they shared to the business.

  We have :

  Ahmad = 5000

  Omer = 10000

  Total Capital = 15000

  Profit to be distributed = 1500

  Formula  to find each partners percentage of shared capital :

  Partner's % of investment = 100 X His/Her capital / Total Capital.

  So , for Ahmad  = 100 X 5000 / 15000 ,   = 33.33%

  So , he should receive 33.33% of the total profit  , which becomes :

  33.33 X 1500 / 100 ,      = 500 .

  For Omer , who owes the remaining percentage ( 100 – 33.33 = 66.67)

  66.67 X 1500 / 100 , = 1000.

  Income Distribution ( Based on Capital )

                                Balance              Ratio              Income      Allocation

  Omer,Capital            5,000                   66.67%           1,500       1,000

  Ahmad , Capital       1,0000                  33.33%            1,500       500

  Totals                    1,5000                100%                        1,500

  ·         Allocation Based on Services , Capital , and Stated Ratio :  Some of the Partners may take more active part in daily process of their business than other partners , or may be some of the partners never take part directly to the business and just share capital , so the one who runs the business , should receive for his service .Secondly , they may agreed on some Ratios to distribute their profit of based on their capital . In fact , it is a combined method which will occur more than other methods, practically.

  Suppose a business started by , Ahmad with 20000 , Omer with 15000 , and  Sameer with 25000.

  At the  beginning , they agreed to these terms :

  The business will pay a salary of 3000 per year for Ahmad .

  All partners would receive 5% allowance  of their Capital. ( The business should pay , some % of Capital tax to the government monthly . Because they their investments differs , so they take it from business as an allowance themselves to pay ! )

  The remaining , which is the net profit , should be distributed equally.

  Pretend the gross profit is 15000 ,  let's distribute it according to the conditions given above.

   Ahmad's Revenues = ?

  Ahmad's Revenues =   his Salary ( 3000 ) + his 5% Allowance ( 5 X 20000 / 100 = 1000. )  + His profit 3000. Equals to 7000. ( His profit becomes ; The Gross Profit ( 15,000 )  - Salaries ( 3000 ) & Allowances (3000)  = 9,000/3 , = 3,000. )

  Income Distribution  

  ( Based on Service , Stated Ratio & Capital Balance)

                                Ahmad      Omer      Sameer    Remainder

  Net Income                                                           15,000

  Salaries                  3,000                                                                                                                  

  Allowances             1,000       750            1250       12,000

  Equal Allocation      3,000        3,000         3,000                      

  Income                 7,000       3,750        4,250                .