Mow & Grow records the revenue on January 31st 400 Accounts Receivable (4+) Lawn Maintenance Revenue ( RSE) 400 Mow & Grow records the collection on February 7th Cash (A+) 392 Sales discount (XR+SE-) 8 Accounts Receivable (A-) 400 Customer 5 has paid her account in full by paying her invoice within 10 days she tokes odvontage of the sales discount, she saves SB, 2% of the invoice CMOUTE (5400X.02= 58) Net Revenue or Net Sales Effect of the lawn maintenance and cash payment on the income statement: 5400 Lawn Maintenance Revenue Sales discount (contra revenue) Net Lawn Maintenance Revenue 8 $392 Sales Returns and Sales Allowances (Contra Revenue) Revenue (sometimes called "Gross sales or "Sales) Sales Returns and Sales Allowances Sales discounts Net Sales Revenue contra revenyes Net Revenue If no contra revenue accounts are present "Sales and "Net Sales" would be the same amount. (l.e., Sales-0= Net Sales.) Practice T-Mart reported the following amounts at the end of the year. Total sales =$550,000, sales discounts = $15,000, accounts receivable = 550,000, sales returns = $40,000, sales allowances = $20,000, accumulated depreciation=59,000. Determine net sales for T-Mart End of Period Adjustment for Contra Revenues Record an adjusting entry for estimated contra revenues for sales made during the period. From page 5-2 of the VLN, which of the following accounts are subtracted from sales to compute Net sales? 1. Allowance for uncollectible accounts 2. Deferred revenue 3. Sales discounts 4. Sales returns and allowances 5. Accumulated depreciation 6. Trade discount 0 1-6 O 2, 3, 4, and 6 O 3 and 4 O 3, 4 and 6