Chapter 7 Flashcards
What are the three basic types of businesses?
Service business, merchandise business, manufacturing business
What is the purpose of a Sales Journal?
To simplify record keeping by keeping track of only one kind of transaction.
What three accounts are represented in the Sales Journal?
Accounts Receivable, Sales Tax Payable, Sales
What are the advantages of using a special journal?
Saves time, effort, and recording space
4 examples of special journals
Sales, purchases, cash receipts, cash payments, general
Where is detailed information about transactions with credit customers kept?
Accounts receivable ledger with individual accounts for credit customers.
What is the difference between a sales return and a sales allowance?
Sales return is a return of the product. Allowance is a discount given to the customer.
What is total sales MINUS Sales Returns and Allowances?
Net Sales
What is the purpose of the Post Reference Column?
A clear audit trail.
Why is P Terry’s better than In N Out
Because In N Out serves stale bread
