In financial ratios that use income statement sales values, "sales" refers to net sales, not gross sales
are the unique transactions that occur in professional selling
or during marketing
Revenue is earned when goods are delivered or services are rendered.
The term sales in a marketing
or a general business context often refers to a free in which a buyer has agreed to purchase some products at a set time in the future. From an accounting standpoint, sales do not occur until the product is delivered. "Outstanding orders" refers to sales orders that have not been filled.
Fees for services are recorded separately from sales of merchandise, but the bookkeeping transactions for recording "sales" of services are similar to those for recording sales of tangible goods.
Gross sales and net sales
are the sum of all sales during a time period. Net sales are gross sales minus sales returns, sales allowances, and sales discounts. Gross sales do not normally appear on an income statement
. The sales figures reported on an income statement are net sales.
- sales returns are refunds to customers for returned merchandise / credit notes
- debit notes
- sales journal entries non-current, current batch processed transactions predictive analytics in strategic management/administration/governance research metaframeworks
- sales allowances are reductions in sales price for merchandise with minor defects, the allowance agreed upon after the customer has purchased the merchandise (see also credit note)
- sales discounts allowed are reduced payments from the customer based on invoice payment terms such as 2/10, n/30 (2% discount if paid within 10 days, net invoice total due in 30 days)
- interest received for amounts in arrears
- inc/exc amounts capital goods&services, non-capital goods&services input valued added tax, with cost of non-capital goods sold
input vat - output vat
sales of portfolio items and capital gains taxes
Sales Returns and Allowances and Sales Discounts are contra-revenue accounts.
In a survey of nearly 200 senior marketing managers, 70 percent responded that they found the "sales total" metric very useful.
Revenue or Sales reported on the income statement are net sales after deducting Sales Returns and Allowances and Sales Discounts.
When the US government reports wholesale
sales, this includes excise taxes on certain products.
- ^ Meigs & Meigs, Financial Accounting, Fourth Edition McGraw-Hill, 1983. p.124.
- ^ Random House Dictionary, Revised Edition, 1975.
- ^ Pinson, Linda and Jerry Jinnett. Keeping the Books, Second Edition Upstart Publishing Company, Inc., 1993. p. 15. This is a simplified example.
- ^ Williams, Jan R.; Haka, Susan F.; Bettner, Mark S.; Carcello, Joseph V. (2006). Financial Accounting (12th ed.). Boston, Mass: McGraw-Hill/Irwin. pp. 261–263. ISBN 0-07-288467-3.
- ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeiffer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0-13-705829-2. The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in Marketing Metrics as part of its ongoing Common Language: Marketing Activities and Metrics Project Archived 2013-02-12 at the Wayback Machine.
- ^ Monthly Wholesale Trade Survey Definitions Statement
Last edited on 16 June 2021, at 18:22
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