Unit 5: chapters 14 & 15

Question 1

retail

Answer 1

a business that sells to the final user (consumer)

Question 2

wholesaler

Answer 2

a business that sells to retailers

Question 3

merchandise

Answer 3

goods bought for resale

Question 4

inventory

Answer 4

items of merchandise the business has in stock

Question 5

sales

Answer 5

amount of merchandise sole (sales account has normal CREDIT balance)

Question 6

sales on account

Answer 6

sale of merchandise that will be paid for at a later date

Question 7

charge customer

Answer 7

sale on account is made to charge customer

Question 8

credit card

Answer 8

issued by businesses for consumers to make their purchases
(facilitates sales on account)

Question 9

sales slip

Answer 9

a form that lists these details:
-date of the sale
-customer account identification
-description, quantity, and price of the items sold

Question 10

sales tax

Answer 10

tax on the retail sales of goods and services
(paid by a customer to business who gives it to the government)

Question 11

purchase order

Answer 11

a written offer to a supplier to buy specified items

Question 12

purchases accounts

Answer 12

account used to record the cost of merchandise purchased during a period

Question 13

discount period

Answer 13

time within which an invoice must be paid if the discount is taken

Question 14

cost of merchandise

Answer 14

account that contains the actual cost to the business of the merchandise sold to customers

Question 15

purchase requisition

Answer 15

a written request to order a specified item or items

Question 16

purchase allowance

Answer 16

occurs when a business keeps less than satisfactory merchandise and pays a reduce price

Question 17

purchase discount

Answer 17

buyers cash discount for early payment on an invoice account

Question 18

accounts payable subsidiary ledger

Answer 18

separate ledger that contains accounts for all creditors; summarized in the accounts payable controlling account in the general ledger

Question 19

purchase return

Answer 19

return of merchandise bought on account to the supplier for full credit

Question 20

FOB destination

Answer 20

when the supplier pays the shipping cost to the buyers destination or location

Question 21

packing slip

Answer 21

a form that lists the items included in the shipment

Question 22

debit memo

Answer 22

used to notify suppliers (creditors) of a return or request an allowance

Question 23

bankcard fee

Answer 23

fee charged for handling bankcard sales slips; usually based on total amounts recorded on the sales slip process

Question 24

premium

Answer 24

cost of insurance protection that is paid in advance at the beginning of the covered period

Question 25

FOB shipping point

Answer 25

buyers pays the shipping charge from the suppliers shipping point

Question 26

purchase order

Answer 26

a written offer to a supplier to buy specified items

Question 27

purchases account

Answer 27

the account used to record the cost of merchandise purchased during a period

Question 28

discount period

Answer 28

the time within which an invoice must be paid if the discount is taken

Question 29

cost of merchandise

Answer 29

account that contains the actual cost to the business of the merchandise sold to customers

Question 30

purchase requisition

Answer 30

a written request to order a specified items or items

Question 31

purchase allowance

Answer 31

this occurs when a business keeps less than satisfactory merchandise and pays a reduced price

Question 32

purchase discount

Answer 32

the buyers cash discount for early payment for an invoice on account

Question 33

accounts payable subsidiary ledger

Answer 33

a separate ledger that contains accounts for all creditors; its summarized in the accounts payable controlling account in the general ledger

Question 34

purchase return

Answer 34

the return of merchandise bought on account to the supplier for full credit

Question 35

FOB destination

Answer 35

when the supplier pays the shimming cost to the buyers destination or location (Free on Board)

Question 36

packing slip

Answer 36

a form that lists the items included in the shipment

Question 37

debit memo

Answer 37

used to notify suppliers (creditors) of a return or to request an allowance

Question 38

bankcard fee

Answer 38

a fee charged for handling bankcard sales slips; usually based on the total amounts recorded on the sales slip processed

Question 39

premium

Answer 39

the cost of insurance protection that is paid in advanced at the beginning of the covered period

Question 40

FOB shipping point

Answer 40

the buyers pays the shipping charge from the suppliers shipping point