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ACCT - Unit 4
Basic Accounting Cycle - Merchandising Business
| Term | Definition |
|---|---|
| Accounts payable ledger | a subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account |
| Accounts receivable ledger | a subsidiary ledger containing only accounts for charge customers |
| Batch report | a report which gives performance information over a specific date range |
| Batching out | closing out all the transactions on the system that were processed for a particular day |
| Capital stock | total amount of a firm's capital, represented by the value of its issued common and preferred stock (ordinary and preference shares) |
| Corporation | business that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners |
| Cash discount | incentive offered by a seller to a buyer for settling the invoice immediately on delivery or in a period substantially shorter than the conventional period in that industry or market |
| Cash receipt journal | journal in which all cash receipts and payments (including bank deposits and withdrawals) are recorded first, in chronological order, for posting to general ledger |
| Cash over | a petty cash on hand amount that is more than a recorded amount |
| Cash sale | a sale in which cash is received for the total amount of the sale at the time of the transaction |
| Cash short | a petty cash on hand amount that is less than a recorded amount |
| Contra account | an account that reduces a related account on a financial statement |
| Controlling account | an account in a general ledger that summarizes all accounts in a subsidiary ledger |
| Cost of merchandise | the price a business pays for goods it purchases to sell |
| Cost of merchandise sold (goods) | the total original price of all merchandise sold during a fiscal period |
| Credit card sale | a sale in which a credit card is used for the total amount of the sale at the time of the transaction |
| Credit memorandum | form or letter sent by a seller to a buyer, stating that a certain amount has been credited to the buyer's account |
| Current assets | any asset expected to last or be in use for less than one year |
| Customer | a person or business to which merchandise or services are sold |
| Debit memorandum | form or letter issued by a seller to advise the amount owed by the buyer |
| Distribution of net income statement | a partnership financial statement showing net income or loss distribution to partners |
| General amount column | a journal amount column that is not headed with an account title |
| Gross profit on sales | the revenue remaining after cost of merchandise sold has been deducted |
| Historical cost concept | the actual amount paid for merchandise or other items bought is recorded |
| Inventory | the amount of goods on hand |
| List price | the retail price listed in a catalog or on an Internet site |
| Markup | the amount added to the cost of merchandise to establish the selling price |
| Merchandise | goods that a merchandising business purchases to sell |
| Merchandise inventory | the amount of goods on hand for sale to customers |
| Owner's equity statement | a financial statement that summarizes the changes in owner's equity during a fiscal period |
| Partner | each member of a partnership |
| Plant assets | assets that will be used for a number of years in the operation of a business |
| Purchase invoice | an invoice used as a source document for recording a purchase on account transaction |
| Point-of-sale (POS) terminal | a computer used to collect, store, and report all the information of a sales transaction |
| Purchases discount | a cash discount on purchases taken by a customer |
| Purchases return | credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable |
| Purchases allowance | credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's account payable |
| Retail merchandising business | a merchandising business that sells to those who use or consume the goods |
| Retained earnings | an amount earned by a corporation and not yet distributed to stockholders |
| Sales discount | a cash discount on sales |
| Sales journal | a special journal used to record only sales of merchandise on account |
| Sales return | credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor's accounts receivable |
| Sales allowance | credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable |
| Sales tax | a tax on a sale of merchandise or services |
| Schedule of accounts payable | a listing of vendor accounts, account balances, and total amount due all vendors |
| Schedule of accounts receivable | a listing of customer accounts, account balances, and total amount due from all customers |
| Share of stock | each unit of ownership in a corporation |
| Stockholder | an owner of one or more shares of a corporation |
| Special amount column | a journal amount column headed with an account title |
| Subsidiary ledger | a ledger that is summarized in a single general ledger account |
| Supporting schedule | a report prepared to give details about an item on a principal financial statement |
| Terms of sale | an agreement between a buyer and a seller about payment for merchandise |
| Terminal summary | the report that summarizes that cash and credit card sales of a point-of-sale terminal |
| Trade discount | a reduction in the list price granted to customers |
| Vendor | a business from which merchandise is purchased or supplies or other assets are bought |
| Wholesale merchandising business | a business that buys and resells merchandise to retail merchandising businesses |
Created by:
candace.freeman
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