Under the net method, when a company uses a perpetual inventory system, an invoice for $2,000 with terms of 2/10, n/30 should be recorded with a debit to Merchandise Inventory and a credit to Accounts Payable of $2,000.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Sales Discounts is added to the Sales account when computing a company’s net sales.

A receivable is an amount due from another party.

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

The expense recognition (matching) principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company’s other financial statement items such as sales and net income.

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Sales of $350,000 and net sales of $323,000 could reflect sales discounts of $27,000.

The maturity date of a note receivable: