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A n allowance is a Contra Account which is deducted from the relevant accounts either on Income Statement or on B alance Sheet in order to match the Expenses with the relevant Revenues on income statement or to calculate the N et Realizable Value of relevant Accounts on balance sheet. Examples of allowances are Allowance for Doubtful Accounts , Allowance For Accumulated Depreciation , Sales Allowances , Purchases Allowances , etc. I n case of selling and b uyi ng of goods and services, a n allowance is a reduction in the selling price offered by the seller to the buyer to retain the goods because of minor defects. How To Record Allowa nces In Accounting Recording of Allowances in Accounting depends upon the types of allowances which are described below: 1. Sales Allowances 2. Purchases Allowances 3. Allowance for Doubtful Accounts 4. Allowance for Accumulated Depreciation   1. Sales Allowances Sales all

Shutdown Versus Restart It Seems like there is a small difference between shutdown and restart (reboot) but there are some major differences between these two Information Technology’s terms which are expressed below: 1. The main or primary difference between shutdown and Restart is that a shutdown of a computer or laptop system turned off or close down all of the programs and processors while a Restart temporarily close down the programs in order to refresh the system or program updates to take effect effectively on next reboot or restart. 2. Shutdown the computer or laptop system closing down all of the programs and processors. You shutdown a computer when you want a rest, a break or go the sleep. On the other had, you Restart a computer or laptop system, when you want to update the system such as when you installed windows updates to take effect on the next reboot. A restart of the computer system basically, refreshes the required necessary system files on t

Sales Reve nues Less the Cost of Goods Sold / Cost of Sales is equal to Gross Profit or Gross Income or Gross Loss. Mathematically, we can write as shown below:                            Gross Profit / Gross Loss = Sales - Cost of Sales This equation is used to calculate Gross Profit or Gross Loss on Income Statement or Trading Account . If Cost of Goods Sold is more than Sales , then there is Gross Loss and the business is facing the loss during the accounting cycle.

Goods Purchased is called Purchases which may b e for Cash or O n Account while office supplies are used in the office of the business during the daily operations of the business. Examples include Stationary which include Pencils, Pens, Inkport, print paper, office equipment such as computers & laptops, printers, office furniture such as Tables, chairs, etc. Purchases are recorded on Income Statement or Trading Account as a Direct Expense while Office Suppliers are considered as either Expenses like Stationary & Printing, etc., Current Assets or N on Current Assets / Fixed Assets like office equipment, if using within one year or more than one year, on the Financial Statements .

Goods Purchased are called Purchases i n Accounting while Direct Expenses are incurred to make us possible to make purchases i.e., we paid Wages Expense in order to carry out the products or goods to desired destination such as godown or warehouse of the business. Other examples include Transportation Expenses, import duty, octori duty etc. So, these Expenses are also added to the cost of production with the purchases as these are incurred to earn direct revenues for the business from main or primary source of Revenues . Purchases is added to Opening Inventory while direct expenses are added to the purchases i n order to calculate Cost of Goods Sold or Cost of Sales for the accounting period.

Purchases are the purchasi ng of goods for cash or on account / credit while Discount is the reduction in the selling price in order to induce the customers to buy more goods, products or services at a discounted price. Two types of purchases are Cash Purchases and Credit Purchases  / Purchases On Account  while various types of discounts include Sales Discount, Purchases Discount, Cash Discount, Discount Allowed, Discount Received, Trade Discount, Quantity Discount, etc.

Purchases is the part of cost of productio n. It is a Direct Expense to be recorded in the Income Statement or Trading Account in order to calculate the Cost of Goods Sold / Cost of Sales . Cost of Goods Sold or Cost of Sales is the sum of Opening Inventory plus Purchases minus Closing Inventory. Cost of Sales include all the direct expenses including Purchases in order to sell the products to end customers. So, cost of sales is a wider term as it includes purchases as well. Similarities Betwee n Purc hases A nd Cost of Goods Sold Both are i ncurred to produce goods or products to sell to end customers for t he accou nting period. Both are used i n t he calculatio n of Gross Profit or Gross Income and recorded in Income Statement or Trading Account . Relatio nship Betwee n Purc hases A nd Cost of Goods Sold The relationship between purchases and cost of goods sold can be derived from the following formula: