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40 Cards in this Set
- Front
- Back
Compound Journal Entry
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A journal entry affecting more than two accounts; an entry that has more than one debit and/or more than one credit.
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Cost of Goods Sold
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The cost of the inventory that the business has sold to customers.
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Credit Memorandum
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A document that supports the return of goods from the customer and the adjustment to the customer's account balance.
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Credit Terms
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The parment terms for customers who buy on account.
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Debit Memorandum
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A document that supports the return of goods to the supplier and the adjustment to the balance owed to the supplier.
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Discount Period
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Period in which the buyer can make early payment for a purchase and receive a discount on that purchase.
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EOM
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Credit term specifying that payment for a purchase is due by the end of the month. Also referred to as n / eom.
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FOB Destination
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Shipping term specifying that title to goods passes to the buyer when the goods are received at buyer's destination; thus, the seller pays the cost of shipping the goods to this destination.
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FOB Shipping Point
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Shipping term specifying that title to goods passes to the buyer when the goods are shipped at the seller's place of business; thus the buyer pays the cost of shipping the goods to its location.
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Freight
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The cost of shipping merchandise from the seller to the buyer.
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General and Administrative Expenses
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Office expenses, such as the salareies of the company president and office employees, depreciation of items used in administration, rent, utilities, and property taxes on the office building.
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Gross Margin
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Net sales revenue minus cost of goods sold. Also called gross profit.
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Gross Margin Percentage
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A measure of profitability equal to gross margin divided by net sales revenue. Also called gross profit percentage.
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Gross Profit
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Net sales revenue minus cost of goods sold. Also called gross margins.
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Gross Profit Percentage
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A measure of profitability equal to gross profit divided by net sales revenue. Also called gross margin percentage.
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Income From Operation
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Gross profit minus operating expenses. Also called operating income.
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Inventory
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All the goods purchased for resale to customers in the normal course of merchandising operations. Also called merchandise inventory.
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Inventory Turnover
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The ratio of cost of goods sold to average inventory. Measure the number of times a company sells its average level of inventory during a year.
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Merchandise Inventory
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All the goods purchased for resale to customers in the normal course of merchandising operations. Also called inventory.
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Multistep Income Statement
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Income statement format that calculates net income or net loss by listing important subtotals such as gross profit and operating income.
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n/30
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Credit term specifying that payment for a purchase is due within 30 days after the date of the income.
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n/eom
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Credit term specifying that payment for a purchase is due by the end of the month. Also referred to as eom.
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Net Sales Revenue
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Sales revenue less sales discounts and sales returns and allowances.
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Operating Expenses
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Expenses of operating a business other than cost of goods sold. Examples include depreciation, rent, salaries, utilities, advertising, delivery expenses, property taxes, and supplies expense.
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Operating Income
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Gross profit minus operating expenses. Also called income from operations.
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Other Revenues and Expenses
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Revenue and expenses that fall outside the main operations of a business, such as interest expense and a loss on the sale of long-term assets.
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Periodic Inventory System
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An inventory system in which the business does not keep a continuous record of inventory on hand. At the end of the period, a physical count of inventory is taken and determines the inventory owned as well as the cost of the goods sold.
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Perpetual Inventory System
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An inventory system in which the business keeps a continuous record of inventory owned and the cost of the goods sold.
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Purchase Discount
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Discount received on purchases by paying early cash within a discount period.
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Purchase Returns and Allowances
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A reduction in the amount owed for a purchase from returning merchandise or accepting damaged goods.
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Sales Discount
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Discount granted on sales for the customer's early payment within a discount period; a contra-account to Sales Revenue.
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Sales Invoice
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A bill that documents the sale of goods to a business customer.
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Sales Returns and Allowances
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A reduction in the amount of customer sales from returning merchandise or accepting damaged goods; a contra-account to Sales Revenue.
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Sales Revenue
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The amount that a retailer earns from selling its inventory.
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Selling Expenses
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Expenses related to advertising and selling products including sales salaries, sales commissions, advertising, depreciation on items used in sales, and delivery expense.
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Single-Step Income Statement
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Income statement format that groups all revenues together and lists all expenses together, subtracting total expenses from total revenues and calculating net income or net loss without computing any subtotals.
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Subsidiary Ledger
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An accounting record that contains details, such as a list of customers and the accounts receivable due from each, or a list of suppliers and the accounts payable due to each.
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Supply Chain
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The chain of transactions between businesses that supply goods and the customers who ultimately use them.
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Title
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Ownership
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Wholesales
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Businesses that buy goods from manufacturers and resell them to retailers.
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