H0bis - Voorbeelden commerciële en financiële verrichtingen.pptx

# Accounting processing of commercial transactions This section outlines the accounting treatment for common commercial transactions, including purchases, sales, discounts, credit notes, additional costs, and returnable packaging. ## 1. Accounting processing of commercial transactions ### 1.1 Purchases of goods The accounting entry for the purchase of goods involves debiting the inventory account and the input value-added tax (VAT) account, and crediting the supplier's account. **Example:** On October 1, 20X0, ELEKTRA nv purchases 20 computers at a price of 500.00 dollars per unit, excluding 21% VAT. * **Debit:** Inventory (20 units * 500.00 dollars/unit) = 10,000.00 dollars * **Debit:** Input VAT (21% of 10,000.00 dollars) = 2,100.00 dollars * **Credit:** Supplier account = 12,100.00 dollars ### 1.2 Sales of goods The accounting entry for the sale of goods involves debiting the customer's account and crediting the sales revenue account and the output VAT account. **Example:** On October 2, 20X0, ELEKTRA nv sells 5 computers at a price of 750.00 dollars per unit, excluding 21% VAT. * **Debit:** Customer account = 4,537.50 dollars * **Credit:** Sales revenue (5 units * 750.00 dollars/unit) = 3,750.00 dollars * **Credit:** Output VAT (21% of 3,750.00 dollars) = 787.50 dollars ### 1.3 Commercial discounts on purchase invoices Commercial discounts are deducted from the gross purchase price before calculating VAT. **Example:** On October 4, 20X0, ELEKTRA nv purchases 10 smartphones at 200.00 dollars per unit, excluding 21% VAT, with a 5% commercial discount. * **Gross Purchase Price:** 10 units * 200.00 dollars/unit = 2,000.00 dollars * **Commercial Discount:** 5% of 2,000.00 dollars = 100.00 dollars * **Net Purchase Price:** 2,000.00 dollars - 100.00 dollars = 1,900.00 dollars * **Input VAT:** 21% of 1,900.00 dollars = 399.00 dollars The journal entry would reflect the net purchase price and the corresponding VAT. ### 1.4 Commercial discounts on sales invoices Commercial discounts offered on sales are deducted from the gross sales price before calculating VAT. **Example:** On October 5, 20X0, ELEKTRA nv sells 2 smartphones at 350.00 dollars per unit, excluding 21% VAT, with a 5% commercial discount. * **Gross Sales Price:** 2 units * 350.00 dollars/unit = 700.00 dollars * **Commercial Discount:** 5% of 700.00 dollars = 35.00 dollars * **Net Sales Price:** 700.00 dollars - 35.00 dollars = 665.00 dollars * **Output VAT:** 21% of 665.00 dollars = 139.65 dollars The journal entry would reflect the net sales price and the corresponding VAT. ### 1.5 Incoming credit notes An incoming credit note is issued by a supplier for returned goods or an adjustment to an invoice. It reduces the recorded purchase cost and the input VAT. **Example:** On October 6, 20X0, 2 smartphones are returned due to damage. The original purchase price was 200.00 dollars per unit (excluding 21% VAT), and a 5% commercial discount was previously applied. * **Original Net Purchase Price per unit:** 200.00 dollars * (1 - 0.05) = 190.00 dollars * **Total Original Net Purchase Price for 2 units:** 2 units * 190.00 dollars/unit = 380.00 dollars * **Input VAT on returned goods:** 21% of 380.00 dollars = 79.80 dollars The journal entry will debit the supplier account and credit the inventory account and the input VAT account. > **Tip:** When dealing with returned goods that had a commercial discount, ensure the credit note reflects the net amount after the discount, not the gross price. ### 1.6 Outgoing credit notes An outgoing credit note is issued to a customer for returned goods or an adjustment to a sales invoice. It reduces the recorded sales revenue and the output VAT. **Example:** On October 7, 20X0, an additional 2% discount is granted on a previous sale (VF/1) of 5 computers. The original selling price was 750.00 dollars per unit, excluding 21% VAT. * **Original Net Sales Price for 5 units:** 5 units * 750.00 dollars/unit = 3,750.00 dollars * **Additional Discount:** 2% of 3,750.00 dollars = 75.00 dollars * **Reduction in Output VAT:** 21% of 75.00 dollars = 15.75 dollars The journal entry will debit sales returns and allowances, debit output VAT, and credit the customer account. ### 1.7 Additional costs on purchase invoices Additional costs incurred on purchases, such as transport, are typically added to the cost of inventory and are subject to VAT. **Example:** On October 8, 20X0, ELEKTRA nv purchases 20 computers at 500.00 dollars per unit, excluding 21% VAT. Transport costs of 50.00 dollars are charged, and a 5% commercial discount is applied to the computer price. * **Price of computers:** 20 units * 500.00 dollars/unit = 10,000.00 dollars * **Commercial Discount:** 5% of 10,000.00 dollars = 500.00 dollars * **Net price of computers:** 10,000.00 dollars - 500.00 dollars = 9,500.00 dollars * **Transport Costs:** 50.00 dollars * **Total Excl. VAT:** 9,500.00 dollars + 50.00 dollars = 9,550.00 dollars * **Input VAT:** 21% of 9,550.00 dollars = 2,005.50 dollars The journal entry will debit inventory (for the net computer price and transport costs) and input VAT, and credit the supplier. ### 1.8 Additional costs on sales invoices Additional costs incurred on sales, such as installation or delivery, are generally treated as separate revenue or expenses, or added to the sales price if they are directly related to the sale. VAT is applied to the total invoiced amount. **Example:** On October 9, 20X0, ELEKTRA nv sells 5 computers at 750.00 dollars per unit, excluding 21% VAT. Installation costs of 50.00 dollars are charged, and a 5% commercial discount is applied to the computer price. * **Price of computers:** 5 units * 750.00 dollars/unit = 3,750.00 dollars * **Commercial Discount:** 5% of 3,750.00 dollars = 187.50 dollars * **Net price of computers:** 3,750.00 dollars - 187.50 dollars = 3,562.50 dollars * **Installation Costs:** 50.00 dollars * **Total Excl. VAT:** 3,562.50 dollars + 50.00 dollars = 3,612.50 dollars * **Output VAT:** 21% of 3,612.50 dollars = 758.63 dollars The journal entry will debit the customer account and credit sales revenue (for the net computer price and installation costs) and output VAT. ### 1.9 Returnable packaging on purchase invoices Returnable packaging may be invoiced separately with a deposit. The deposit is typically credited to a liability account and debited when the packaging is returned. **Example:** On October 10, 20X0, ELEKTRA nv purchases goods with returnable packaging costing 25.00 dollars, including VAT. The journal entry would involve debiting inventory and input VAT, and crediting the supplier and a liability for returnable packaging deposit. ### 1.10 Returnable packaging on sales invoices When selling goods with returnable packaging, a deposit is often charged to the customer, which is a liability until the packaging is returned. **Example:** On October 11, 20X0, ELEKTRA nv sells 2 computers. The sale includes a charge of 25.00 dollars for protective boxes (a deposit). The computer sale itself has a price of 750.00 dollars per unit, excluding 21% VAT, with a 3% commercial discount, and 50.00 dollars in transport costs. * **Computer Price:** 2 units * 750.00 dollars/unit = 1,500.00 dollars * **Commercial Discount:** 3% of 1,500.00 dollars = 45.00 dollars * **Net Computer Price:** 1,500.00 dollars - 45.00 dollars = 1,455.00 dollars * **Transport Costs:** 50.00 dollars * **Packaging Deposit:** 25.00 dollars * **Total Sale Price (excl. VAT):** 1,455.00 dollars + 50.00 dollars = 1,505.00 dollars * **Output VAT:** 21% of 1,505.00 dollars = 316.05 dollars The journal entry will debit the customer account for the total amount including VAT and the packaging deposit, and credit sales revenue, transport revenue, and output VAT. A separate entry will be made for the packaging deposit as a liability. ### 1.11 Financial discounts on purchase invoices Financial discounts are offered for early payment and are recognized as financial income when the conditions for the discount are met. They are not deducted from the cost of inventory or input VAT. **Example:** On October 17, 20X0, a payment is made for purchase AF/5 within the specified 10-day discount period, resulting in a financial discount. The subtotal before VAT was considered for the discount calculation. The journal entry for payment will reflect the settlement of the supplier account, the receipt of the financial discount (as financial income), and the reduction in cash. > **Tip:** Financial discounts are separate from commercial discounts. Commercial discounts affect the purchase price of the goods, while financial discounts relate to the timing of payment. ### 1.12 Financial discounts on sales invoices Financial discounts offered for early customer payment are recognized as financial expenses for the company when the customer takes advantage of the discount. **Example:** On October 25, 20X0, a customer settles invoice VF/5 within the specified 10-day discount period. The journal entry for the receipt of payment will reflect the cash received, the financial discount granted (as a financial expense), and the reduction of the customer's account receivable. --- # Additional costs and refundable packaging in accounting This section details the accounting treatment for supplementary costs associated with purchase and sales invoices, as well as the accounting for refundable packaging. ### 2.1 Additional costs on purchase invoices Additional costs incurred on purchase invoices are integrated into the total cost of the goods purchased. These costs can include items such as transport or freight charges. #### 2.1.1 Accounting treatment of additional purchase costs When additional costs are added to a purchase invoice, they are debited to the relevant inventory or expense account, alongside the cost of the goods. The value-added tax (VAT) on these additional costs is also accounted for. **Example:** Suppose ELEKTRA nv purchases 20 computers at a price of 500.00 dollars per unit, exclusive of 21% VAT. Additionally, 50.00 dollars in transport costs are charged. A commercial discount of 5% is also applied to the purchase. * **Calculation of Net Purchase Price:** * Total initial purchase price: $20 \text{ units} \times 500.00 \text{ dollars/unit} = 10,000.00 \text{ dollars}$ * Commercial discount: $10,000.00 \text{ dollars} \times 5\% = 500.00 \text{ dollars}$ * Net price after discount: $10,000.00 \text{ dollars} - 500.00 \text{ dollars} = 9,500.00 \text{ dollars}$ * **Total Cost including Transport:** * Total cost: $9,500.00 \text{ dollars (net price)} + 50.00 \text{ dollars (transport)} = 9,550.00 \text{ dollars}$ * **VAT Calculation:** * VAT on net price: $9,500.00 \text{ dollars} \times 21\% = 1,995.00 \text{ dollars}$ * VAT on transport: $50.00 \text{ dollars} \times 21\% = 10.50 \text{ dollars}$ * Total VAT: $1,995.00 \text{ dollars} + 10.50 \text{ dollars} = 2,005.50 \text{ dollars}$ * **Total Invoice Amount:** $9,550.00 \text{ dollars} + 2,005.50 \text{ dollars} = 11,555.50 \text{ dollars}$ The journal entry would reflect the purchase of goods, transport costs, and input VAT, with the total debited to the appropriate asset or expense accounts and credited to the supplier. ### 2.2 Additional costs on sales invoices Similar to purchase invoices, additional costs may be added to sales invoices, such as installation or delivery charges. These costs increase the revenue recognized from the sale. #### 2.2.1 Accounting treatment of additional sales costs Additional costs on sales invoices are recorded as part of the sales revenue. The VAT applicable to these costs is calculated and remitted. **Example:** ELEKTRA nv sells 5 computers at a price of 750.00 dollars per unit, exclusive of 21% VAT. Installation costs of 50.00 dollars are charged, and a commercial discount of 5% is granted. * **Calculation of Net Sales Price:** * Total initial sales price: $5 \text{ units} \times 750.00 \text{ dollars/unit} = 3,750.00 \text{ dollars}$ * Commercial discount: $3,750.00 \text{ dollars} \times 5\% = 187.50 \text{ dollars}$ * Net price after discount: $3,750.00 \text{ dollars} - 187.50 \text{ dollars} = 3,562.50 \text{ dollars}$ * **Total Revenue including Installation:** * Total revenue: $3,562.50 \text{ dollars (net price)} + 50.00 \text{ dollars (installation)} = 3,612.50 \text{ dollars}$ * **VAT Calculation:** * VAT on net price: $3,562.50 \text{ dollars} \times 21\% = 748.13 \text{ dollars}$ * VAT on installation: $50.00 \text{ dollars} \times 21\% = 10.50 \text{ dollars}$ * Total VAT: $748.13 \text{ dollars} + 10.50 \text{ dollars} = 758.63 \text{ dollars}$ * **Total Invoice Amount:** $3,612.50 \text{ dollars} + 758.63 \text{ dollars} = 4,371.13 \text{ dollars}$ The journal entry would record sales revenue, installation revenue, and output VAT, with the total debited to the customer account and credited to sales revenue and VAT payable accounts. ### 2.3 Refundable packaging Refundable packaging, also known as returnable packaging or a deposit on packaging, is a common practice where a deposit is charged for packaging materials, which is refunded upon their return. #### 2.3.1 Accounting treatment of refundable packaging on purchase invoices When a company purchases goods that include refundable packaging, the deposit charged for this packaging is treated as a separate receivable or a temporary asset. It is not considered part of the cost of the goods purchased. * **Initial Purchase:** The deposit for refundable packaging is debited to an account such as "Deposits on Returnable Packaging" or a similar receivable account. * **Return of Packaging:** Upon the return of the packaging, the deposit is refunded, and the "Deposits on Returnable Packaging" account is credited, effectively reversing the initial debit. **Example:** ELEKTRA nv purchases goods packed in protective boxes, for which a deposit of 25.00 dollars is charged per box. The company will receive this deposit back when the boxes are returned. * **Journal Entry on Purchase:** * Debit: Deposits on Returnable Packaging (or similar receivable account) for 25.00 dollars. * Credit: Supplier Account for 25.00 dollars. When the packaging is returned, the entry would be: * Debit: Supplier Account for 25.00 dollars. * Credit: Deposits on Returnable Packaging for 25.00 dollars. #### 2.3.2 Accounting treatment of refundable packaging on sales invoices When a company sells goods with refundable packaging, the deposit charged to the customer is treated as a liability until the packaging is returned. * **Initial Sale:** The deposit charged for refundable packaging is credited to a liability account, such as "Customer Deposits on Packaging." * **Return of Packaging:** When the customer returns the packaging, the liability is extinguished by debiting the "Customer Deposits on Packaging" account and crediting the cash or bank account for the refund. **Example:** ELEKTRA nv sells computers and charges a deposit of 25.00 dollars for the protective boxes used for shipment. * **Journal Entry on Sale:** * Debit: Customer Account for 25.00 dollars (as part of the total invoice). * Credit: Customer Deposits on Packaging (liability account) for 25.00 dollars. When the customer returns the packaging, the entry would be: * Debit: Customer Deposits on Packaging for 25.00 dollars. * Credit: Cash or Bank Account for 25.00 dollars. > **Tip:** It is crucial to distinguish between commercial discounts and financial discounts. Commercial discounts affect the gross amount of the invoice, while financial discounts are typically offered for early payment and impact financial income or expense. > **Tip:** Always ensure that the VAT is calculated correctly on both the goods/services and any associated additional costs or deposits that are subject to VAT. --- # Financial discounts in accounting This topic explores the accounting treatment of financial discounts offered for early payments on purchase and sales transactions. ### 3.1 Overview of financial discounts Financial discounts are incentives offered to buyers for making payments within a specified period, thereby improving a company's cash flow. These discounts differ from commercial discounts, which are typically applied at the point of sale and reduce the initial transaction price. Financial discounts are recognized at the time of payment if the early payment terms are met. ### 3.2 Financial discounts on purchase transactions When a buyer avails a financial discount on a purchase, the cost of the goods is effectively reduced. The accounting entry for the initial purchase is made at the gross invoice amount. However, if payment is made within the discount period, the discount amount is recognized as a reduction in the cost of inventory or as a financial gain. #### 3.2.1 Accounting for financial discounts on purchases When a financial discount is taken on a purchase, the purchase price recorded initially is the gross amount. Upon payment within the stipulated terms, the discount is accounted for. The key principle is that the cost of goods purchased should reflect the net amount paid. The purchase is initially recorded at its gross value. If payment is made within the discount period, the discount received reduces the cost of the asset (inventory) or is recognized as a financial income. This aligns the carrying value of the inventory with the actual cash outflow. ##### 3.2.1.1 Example of a financial discount on a purchase Let's consider a purchase transaction where a financial discount is applicable. The initial invoice might be for a certain amount, but if the payment is made by a specific date, a percentage discount is granted. * **Scenario:** A company purchases goods with an invoice of 1,000 dollars, with terms 2/10, n/30. This means a 2% discount is available if paid within 10 days, otherwise, the full amount is due in 30 days. * **Payment within 10 days:** If payment is made within 10 days, the company pays 980 dollars (1,000 dollars - 2% of 1,000 dollars). The 20 dollars discount is recognized as a financial gain or a reduction in the cost of goods. * **Payment after 10 days:** If payment is made after 10 days but within 30 days, the full 1,000 dollars is paid. No financial discount is recognized. The accounting entry for a financial discount on a purchase when the discount is taken typically involves: * Debit: Accounts Payable (for the gross amount) * Credit: Inventory (for the net amount paid) * Credit: Financial income or Purchase Discounts (for the discount amount) This treatment ensures that the inventory is valued at its net cost. > **Tip:** When a financial discount is offered on a purchase, the company should aim to take advantage of it if the cost of capital or the benefit of retaining cash for that period does not outweigh the discount. #### 3.2.2 Transactions involving financial discounts on purchases When there is a financial discount involved in a purchase, the booking of the payment should reflect the net amount actually paid. The initial purchase may be recorded at the gross amount, but the settlement of the liability through early payment results in a reduction in the carrying amount of the asset or the recognition of income. **Example Illustration:** Suppose an invoice (AF/5) is for 1,000 dollars, with terms 2/10, n/30. If payment (BU/1) is made within 10 days, the actual cash outflow is 980 dollars. The accounting for the payment would reflect this: * Debit: Accounts Payable (1,000 dollars) * Credit: Bank (980 dollars) * Credit: Financial income (20 dollars) This entry acknowledges the reduction in the liability due to the discount and the actual cash disbursed. ### 3.3 Financial discounts on sales transactions When a company offers a financial discount to its customers for early payment, it recognizes a sales discount. This discount is recorded as a contra-revenue account, reducing the net sales revenue. #### 3.3.1 Accounting for financial discounts on sales For sales transactions, if the customer pays within the discount period, the company receives less cash than the gross invoice amount. The difference is recorded as a sales discount. This account is a contra-revenue account and is debited when the discount is taken. The net sales revenue reported on the income statement should reflect the amount earned after considering any sales discounts taken. ##### 3.3.1.1 Example of a financial discount on a sale Consider a sale with terms 2/10, n/30, for an invoice of 1,000 dollars. * **Customer pays within 10 days:** The customer pays 980 dollars. The company records 20 dollars as a sales discount. * **Customer pays after 10 days:** The customer pays the full 1,000 dollars. No sales discount is recognized. The accounting entry for a financial discount on a sale when the discount is taken typically involves: * Debit: Cash (for the net amount received) * Debit: Sales Discounts (for the discount amount) * Credit: Accounts Receivable (for the gross amount) This approach ensures that revenue is recognized net of anticipated discounts. > **Tip:** Offering financial discounts can improve a company's liquidity by encouraging quicker payments from customers. However, it reduces the effective selling price and thus gross profit. #### 3.3.2 Transactions involving financial discounts on sales When a customer settles an invoice (VF/5) within the discount period, the cash received will be less than the total amount due on the invoice. The difference represents the financial discount granted. The accounting entry for the receipt of payment will reflect this reduction in revenue. **Example Illustration:** If a sale (VF/5) is for 1,000 dollars with terms 2/10, n/30, and the customer pays within 10 days (BU/2), the company receives 980 dollars. The accounting entry for this receipt would be: * Debit: Cash (980 dollars) * Debit: Sales Discounts (20 dollars) * Credit: Accounts Receivable (1,000 dollars) This entry correctly records the cash received, the reduction in revenue due to the discount, and the full settlement of the outstanding receivable. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Purchase of goods | The acquisition of merchandise by a business for resale, recorded in accounting by debiting inventory or cost of goods sold and crediting accounts payable or cash. This entry reflects the initial cost of acquiring the items that will be sold to customers. | | Sale of goods | The transfer of ownership of merchandise from a business to a customer in exchange for payment, accounted for by debiting accounts receivable or cash and crediting revenue. This transaction represents the revenue earned from the primary business operations. | | Value Added Tax (VAT) | A consumption tax placed on a product or service whenever value is added at each stage of the supply chain, from production to the point of sale. It is typically calculated as a percentage of the price of goods or services and is collected by the seller on behalf of the government. | | Commercial discount on purchase invoice | A reduction in the price of goods offered by a supplier to a buyer at the time of sale, often to encourage prompt payment or larger orders. This discount is typically applied before VAT and affects the net cost of the purchased goods. | | Commercial discount on sales invoice | A reduction in the selling price of goods offered by a seller to a buyer, usually to incentivize purchases. This discount is deducted from the gross sales price before calculating the net amount due and any applicable VAT. | | Incoming credit note | A document issued by a supplier to a buyer, typically to correct an overcharge on an original invoice or to acknowledge the return of goods. It reduces the amount owed by the buyer and is recorded as a reduction in inventory or an expense. | | Outgoing credit note | A document issued by a seller to a buyer, usually to acknowledge a return of goods or to correct an overcharge on an original invoice. It reduces the amount of revenue recognized and the amount owed by the customer. | | Additional costs on purchase invoice | Expenses incurred by a buyer in addition to the purchase price of goods, such as transportation or handling fees. These costs are typically added to the cost of inventory, increasing its carrying value on the balance sheet. | | Additional costs on sales invoice | Expenses incurred by a seller in addition to the selling price of goods, such as delivery or installation charges. These costs are usually recognized as an operating expense or directly reduce the gross profit on the sale. | | Returnable packaging on purchase invoice | A charge for packaging materials used for purchased goods that can be returned to the supplier for a refund or credit. The initial charge is often capitalized as a receivable, and a liability is reduced when the packaging is returned. | | Returnable packaging on sales invoice | A charge for packaging materials used for goods sold that can be returned by the customer for a refund or credit. The seller records this as a liability, which is reduced when the packaging is returned and credited back to the customer. | | Financial discount on purchase invoice | A discount offered to a buyer for early payment of an invoice, often expressed as a percentage of the invoice amount if paid within a specified period. This discount reduces the actual cash paid for the purchase. | | Financial discount on sales invoice | A discount offered to a customer for early payment of an invoice, encouraging prompt settlement. This discount reduces the cash received by the seller and is recorded as a financial expense. | | Refundable Packaging on Purchase Invoice | The cost of packaging materials used for goods purchased, which is treated as a deposit or a temporary charge that can be recovered if the packaging is returned to the supplier. | | Refundable Packaging on Sales Invoice | The cost of packaging used for goods sold, where a deposit or a temporary charge is made to the customer, which is refundable upon the return of the packaging to the seller. | | Guarantee Deposit (for packaging) | An amount paid by a customer as security for the return of packaging materials. This amount is refundable once the packaging is returned in the agreed condition. | | Commercial Discount | A reduction in price offered by a seller to a buyer as part of a business transaction, often based on volume or promotional activities. These discounts are typically applied before taxes are calculated. | | Purchase Invoice | A document issued by a seller to a buyer, detailing a transaction and specifying the amount owed for goods or services purchased. It forms the basis for recording the purchase in the buyer's accounting system. | | Sales Invoice | A document issued by a seller to a buyer, detailing a transaction and specifying the amount owed for goods or services sold. It serves as proof of sale and is used for revenue recognition in the seller's accounting records. | | Credit Note (Incoming) | A document issued by a seller to a buyer to reduce the amount owed by the buyer, typically due to returned goods or an overcharge. For the buyer, it represents a reduction in an expense or an increase in a refund. | | Credit Note (Outgoing) | A document issued by a seller to a buyer to reduce the amount of an invoice, usually because of returned goods or an allowance. It decreases the recognized revenue and accounts receivable. | | Additional Costs | Expenses incurred in addition to the base price of goods or services, such as transportation or installation fees. These costs are typically added to the invoice and are subject to the same tax and discount rules as the primary transaction. | | Returnable Packaging | Packaging materials used for shipping goods that are intended to be returned to the seller or supplier. A deposit or charge may be applied, which is refunded upon the return of the packaging. | | Financial Discount | A discount offered for prompt payment of an invoice, often specified as a percentage if payment is made within a certain number of days. These discounts affect the net amount paid and can be recognized as a financial gain or expense. | | Prompt Payment Term | A condition on an invoice that allows the buyer to receive a discount if the payment is made within a specified, shorter period than the standard payment deadline. This encourages faster cash flow for the seller. |