Ch 10, 11 and 12 Definitions Flashcards
Minimum Desired Profit
A lowest acceptable profit figure. usually similar to previous income plus a return on the amount invested
Recommended Retail Price
A selling price that is recommended by the manufacturer or wholesaler
Competitors Price
Prices charged by businesses competing in the same market
Market Reaction
The response of customers in a particular marketplace to price levels for a particular good or service
Mark-up
Determining selling prices by adding to the cost price a predicted profit margin
Cost-volume-profit analysis
An analysis toll that allows a business to determine a selling price or volume of sales that will let them achieve a specific profit goal
Contribution Margin
The gross profit from each sale that goes towards covering fixed expenses and contributing to net profit; calculated by deducting variable costs from the selling price
Stock Card
A subsidiary accounting record that records each individual transaction involving the movement in and out of the business of a particular line of stock
Perpetual Inventory System
System of accounting for stock that involves the continuous recording of stock movements in stock cards
Cost of Sales
The expense incurred when stock flows out of the business due to a sale
Gross Profit
The profit earned purely from the purchase and sale of stock, measured by deducting cost of sales from sales revenue
FIFO
assumption that the stock that is purchased first will be sold first
Stocktake
the process of counting every item of stock on hand to verify the accuracy of the stockcards and detect any stock loss or gain
Stock Loss
An expense that occurs when the stocktake shows less stoke than is shown on the stockcards
Stock Gain
A revenue that occurs when stocktake shows more stock on hand than is shown in the stockcard
