Flashcards in Chapter 7 Terms Deck (23):
A business which sells services.
A business which sells goods that it purchases.
A business which sells goods that it produces.
A subsidiary ledger is a ledger that contains accounts of a single type, such as customers or vendors.
A business which sells goods and services directly to individual customers.
Periodic Inventory System
In a periodic inventory system, the cost of inventory on hand must be determined by counting merchandise inventory in stock.
Perpetual Inventory System
In a perpetual inventory system, the amount of inventory on hand is adjusted for each sale, purchase, or return.
The stock of goods kept on hand.
Contra Revenue Account
An account with a debit balance, which is contrary to the normal balance for a Revenue Account.
An account that links a subsidiary ledger and the general ledger since its balance summarizes the balances of the accounts in the subsidiary ledger.
A note verifying that a customer’s account is being reduced by the amount of a Sales Return or Sales Allowance plus any sales tax that may have been involved.
Terms for payment on credit by buyer to seller.
An established retail price.
The difference between the balance in the Sales account and the balance in the Sales Returns and Allowances account and the Sales Discount 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.
A reduction in the price originally charged to customers for goods or services.
A Contra Revenue account where early payment discounts are recorded.
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 allowances are recorded.
Schedule of Accounts Receivable
A listing of all balances of the accounts in the Accounts Receivable subsidiary ledger.
A reduction from list price.
A business that manufactures goods for or distributes goods to retail businesses or large consumers such as hotels and hospitals.