Sales are calculated by multiplying the units sold by the price. Sales turnover is the summation of all sales made within a year. It includes both credit and cash sales.Know More
Sales turnover is dependent upon the method of accounting. If the accounting is on a cash basis, then the sale is recorded when the cash is received. If a business is using an accrual method of accounting, then the sale is recognized when products ship or services are received. All public companies are required to use the accrual method of accounting.
Sales turnover does not include any revenue received from investments, sales of assets, or interest.Learn more about Accounting
"Accounts payable turnover" is a ratio that measures the liquidity of a company according to the rate at which it pays its suppliers. It is calculated by finding the total supplier purchases and dividing the figure by the average accounts payable for a specific period.Full Answer >
The basic accounting formula is an equation that represents the relationship between assets, liabilities and an owner’s equity. This formula forms the building block or cornerstone for the double entry accounting system, and as is formulated as follows: Asset = Liability + Equity (Owner's Capital)Full Answer >
According to About.com, sales can account for a part or the whole of a company's revenue. Revenue is the amount of money that a company earns from its primary activities. If a company's primary activity is sales, such as a retail corporation, then revenue is the same as sales. If a company has different revenue streams, such as sales and rental income, then sales accounts for a portion of revenue.Full Answer >
Average total assets are calculated by adding together the value of assets at the beginning and end of an accounting period and dividing the sum by two, according to TheFreeDictionary. An accounting period is defined as the period of time reflected in the financial statements of businesses, usually a quarter or a year.Full Answer >