Chap 7 Flashcards
Accounts Receivable Ledger
a subsidiary ledger that contains credit customer accounts; list of all clients with balances
Charge-Account Sales
sales made through the use of open-account credit or one of various types of credit cards
Contra Revenue Account
a account with a debit balance, which is contrary to the normal balance for a revenue account
Control Account
an account that links a subsidiary ledger and the general ledger since its balance summarizes the balance o the accounts in the subsidiary ledger.
Credit Memorandum
a note verifying that a customer’s account is being reduced by the amount of sales return or sales allowance plus any sales tax that may have been involved.
Discount on Credit Card Sales
a fee charged by the credit card companies for processing sales made with credit cards
Invoice
a customer billing for merchandise bought on credit
List Price
an established retail price
Manufacturing Business
a business that sells good that it has produced
Merchandising Business
a business that sells goods purchased for resale
Merchandise Inventory
the stock of goods a merchandising business keeps on hand.
Net Price
the list price less all trade discounts
Net Sales
the difference between the balance in the “sales” account and the balance in the “sales returns and allowance account.”
Open-Account Credit
a system that allows the sale of services or goods with the understanding that payment will be made at a later date.
Periodic Inventory System
an inventory system in which the merchandise inventory balance is only updated when a physical inventory is taken.
Perpetual Inventory System
an inventory system that tracks the inventories on hand at all times.
Retail business
a business that sells directly to individual customers.
Sales Allowance
a reduction in the price originally charged to customers for goods or services
Sales Journal
a special journal used to record sales of merchandise on credit
Sales Return
a firm’s acceptance of a return of goods from a customer
“Sales Returns and Allowances”
a contra revenue account where sales returns and sales allowance are recorded; sales returns and allowances are subtracted from sales to determine net sales.
Schedule of Accounts Receivable
a listing of all balances of the accounts in the account receivable subsidiary ledger.
Service Business
a business that sells services
Special Journal
a journal used to record only one type of transaction
