Trade Fair Billing/Accounts Receivable/Accounts Payable Chapter 5
Purchase Order Spreadsheet
When you go to trade fairs, most of your sales will be charge sales. A charge sale means that the customer will pay you later for the service or merchandise that they just bought. There is considerably more accounting work to be done for a charge sale verses a cash sale. You need to keep track of all of these customers, what they bought, the price of these items or services and how to contact them. Collectively all of these charge sale amounts are classified as a general ledger account called accounts receivable. First, let's look at an invoice. This is the form you fill out when you complete the sale. The invoice is the source document for recording the sale of merchandise or service on account. A sample invoice is included. Just click on the link for invoice to see a sample. Why don't we practice on filling out an invoice. During a trade fair, you want to be sure to fill it out quickly and accurately. Remember, a judge looks at how you handle the paper work during the judging of salesmanship. Remember to give the customer a copy and save one for yourself. Here is the information for the invoice. Remember to print out a copy when finished. A new bride to be, her father, the maid of honor and the best man go to Bromley's in preparation for the upcoming wedding. Dad has generously opted to pay the bill for the formal wear. His name is George Mason. His business is Mason Contractors. His home address is 4720 Alamar, Santa Barbara, CA 93101. The invoice date is today's date and the invoice number is 1101. Invoice number are normally preprinted on invoices or automatically assigned. The numbers should be sequential so that all invoice forms can be accounted for. The following information relates to the purchase. Tax is .0775. VE International has the sales tax at 7% for all sales. The amount should be remitted monthly Bride's dress $1300.00 Maid of Honor dress $650.00 Both Tuxexos $175.00 each Mr. Mason's email address is firstname.lastname@example.org Fill in the information given. Remember to multiple the quantity for the tuxedos by two. Add up all amounts to get a subtotal. Calculate the tax by multiplying the subtotal by .0775. The percentage of sales tax is calculated differently by each county. To convert a percentage to a decimal, move the decimal point two places to the left. For example, 7 1/2 percents would be written as 7.5%. When you move the decimal to the left, the decimal equivalent is .075. Add the tax to the subtotal to get the total of the invoice. When done, press the Verify Invoice button to see if any essential information is missing. You must fill in the top half of the invoice, at least one item, the subtotal, sales tax total and person making the invoice. The Clear button will erase all data from the sheet and let you start over. Remember to print out a copy for your instructor. After completing the above invoice, create one for some of the products you sell. Print out a copy for your instructor. You will need to keep some type of a master list of invoices, dates, customers names and totals. This can be done by hand or using a spreadsheet program. To see an example of one, just click on the link for "invoice spreadsheet". You can use this spreadsheet to keep track of charges, payments and balances for each of your charge sale customers. Ask you instructor if they have installed the Virtual Enterprise Accounts Receivable and Billing Program. This is a great way to keep track of your customers, invoices amount owed and paid. Later on in the lessons, when we learn about journalizing and posting, you will get to see how accounts receivable are normally handled using subsidary ledgers and special journals.
Accounts payable are amounts which a company owes its creditors for goods and services purchased on credit. For example, Bromley's Formal Wear purchaes tuxedos, suits, bride's dresses, shirts, ties and other formal wear from supplies like After Six, Oscar do la Renta, and others. They usually have two ways to buy these goods for resale to their customers: Cash or Credit. Accounts payable are liability accounts that are used when a company like Bromley's Formal Wear buy merchandise on credit from its suppliers. Purchase Orders are made when items are purchased on account. To see a purchase order form, click on the link on this page. To practice filling out a purchase order enter the following information. TO: Prom Girl 2879 7th Street Los Angeles, CA 93999 First Item - 25 Bride's Dresses size 6 Empire Model @ 675.00 each Second Item - 12 Bride's Dresses size 8 A-Line Style @ 895.00 each Third Item - 4 Bride's Dresses size 12 Basque Model @ 945.00 each Use your name as the purchasing agent. Calculate quantiy times price for totals for each item. Total the purchase order when done. No sales tax is charged on purchases made for resale. The bride is the final consumer not Bromley's Formal Wear. When finished, press the Verify Purchase Order button to see if any required fields have been ommited. You need to fill in the top portion and purchase order, at least one item, total the purchase order and fill in the name of the person preparing the purchase order. Print out a copy of the completed purchase order for your instructor. Create a new purhase order for your own company's products. Use suppliers that normally would furnish these kinds of items. When completed, print out a copy for your instructor. A spreadsheet program has been created for you to keep track of the Accounts payable vendors. Later on in the lessons, you will learn the accounting methods used to keep track of accounts payable using specialized journals and subsidary ledgers.
1. A charge sale means that a customer will?
Pay you at the time of the sale.
Pay you later after receiving an invoice.
Pay you at the end of the VE simulation
2. Collectively, all of your charge sales are called?.
3. A form that you fill out when you complete a sale is called
Schedule of Accounts receivable
Chart of Accounts
4.Invoices typically are?
Have no particular order
Do not have numbers