Chapter 9 + 10 Quiz Flashcards
an inventory system that keeps continual track of each type of inventory by recording units on hand at the beginning of each accounting period, units sold, and the current balance after each sale or purchase
Perpetual Inventory System
goods bought into a store for resale to customers
merchandise inventory
in a perpetual inventory system, an account that records the cost of Merchandise Inventory used to make the sale
Cost of Goods Sold
a period shorter than the credit period when a discount is available to encourage early payment of bills
discount period
length of time allowed for payment of goods sold on account
sales discount account
an account in the general ledger that accumulates the amount of sales tax owed. It has a credit balance
sales tax payable account
merchants who buy goods from suppliers and manufacturers for sale to retailers
wholesalers
a book or file that contains the individual records, in alphabetical order, of amounts owed by various credit customers
accounts receivable subsidiary ledger
a ledger that contains accounts of a single type
subsidiary ledger
accounts receivable account in the general ledger shows a firm the total amount of money owed to it by credit customers
controlling account - accounts receivable
a bill sent to customer(s) reflecting a credit sale
sales invoice
a piece of paper sent by the seller to a customer who has returned merchandise previously purchased on credit
credit memorandum
a memo issued by a purchaser to the seller, indicating that some return or allowance has occurred and therefore the purchaser now owes less money on the account
debit memorandum
seller pays or is responsible for the cost of freight to purchaser’s location or destination
FOB destination
buyer pays or is responsible for the shipping cost from seller’s shipping point to purchaser’s location
FOB shipping point
a form used within a business by the requesting department asking the purchasing department of the business to buy specific goods
purchase recognition
a form used in business to place an order for the buying of goods from a seller
purchase order
the seller’s sale invoice, which is sent to the purchaser
purchase invoice
a business form used to notify the appropriate people of the ordered goods received along with the quantities and specific condition of the goods
receiving report
used the accounting department in checking the invoice and finally approving it for recording and payment
invoice approval form
a book or file that contains, in alphabetic order, the name of the creditor and amount owed from purchases on account
accounts payable subsidiary ledger
the account in the general ledger that summarizes or controls a subsidiary ledger
controlling account
