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Chapter 10
| Term | Definition |
|---|---|
| Selling price | the amount a business receives from the sale of an item of merchandise |
| Markup | the amount a business adds to the cost of merchandise to establish the selling price |
| FYI – Realization of Revenue | the revenue should be recorded when a sale is made, not on the date cash is received |
| FYI – formula for Selling price | Cost of merchandise + Markup = Selling price |
| FYI – 2 ways to sale merchandise | 1.On account 2.For cash |
| Account Receivable Ledger | a subsidiary ledger containing all accounts for charge customers |
| Sales tax | a tax on a sale of merchandise or services |
| FYI – 2 tax needs for accuracy | 1.Total sales 2.Total sales tax collected |
| FYI – tax collected classification | only the final consumer of a product is required to pay sales tax |
| Sales Journal | a special journal used to record only sales of merchandise on account |
| Invoice | a form that describes the goods or services sold, the quantity of the price, and the terms of sale |
| FYI – 2 other names for Sales Invoice | 1.Sales ticket 2.Sales slip |
| FYI – 2 entities exempt from sales tax | 1.Sales of necessities 2.Sales to nonprofit organizations |
| Cash Sale | a sale in which the customer pays for the total amount of the sale at the time of the transaction |
| FYI – 3 forms of cash sale | 1.Cash 2.Credit 3.Debit |
| Point-of-Sale (POS) terminal | a specialized computer used to collect, store, and report all the information about a sales transaction |
| FYI – usage for UPC symbol | to obtain description and price of the merchandise |
| Terminal Summary (Z tape) | the report that summarizes the cash and credit card sales of a point-of-sale terminal |
| Batch report | a report of credit card sales produced by a point-of-sale terminal |
| Batching out | the process of preparing a batch report from a point-of-sale terminal |
| FYI – POS terminals support | often used to support a perpetual inventory system by maintaining an up-to-date quantity of all merchandise on hand |
| Cash Receipts Journal | a special journal used to record only cash receipt transactions |
| Sales Discount | a cash discount on a sale taken by the customer |
| FYI – 2/10, n/30 | 2/10-when a customer pays the amount owed in 10 days they get a 2% discount n/30-if the discount is not taken, the net amount is due in 30 days |
| FYI – 6 steps to proving Cash | cash on hand at beginning of month + total cash received = total. Total - cash paid = cash balance at end of month. The total is what your next check stub balance will be |
| Schedule of Accounts Receivable | a listing of customer accounts, account balances, and total amount due from all customers |
Created by:
sjacobs1203