Exam 5

  1. Acid Test Ratio
    (quick ratio) quick assets divided by current labilities
  2. Allowance
    an adjustment made for merchandise received damaged or unsatisfactory
  3. cash discount
    discounts from quoted prices are an inducement for prompt payment of invoices
  4. cash payment journal
    a book of journal entry in which only cash disbursements are recorded
  5. combination journal
    a journal with special & general columns
  6. controlling account
    a summary maintained in the general ledger with a subsidary ledger
  7. cost of goods sold
  8. credit memo
    a source document that grants credit to a buyer for a purchase return or a purchase allowance
  9. current ratio (current asset ratio)
    current assets divided by current liabilities
  10. debit memo
    a journal request for credit to be granted by the supplier is usually issued by the buyer for the purchase price of the merchandise returned
  11. FOB (free on board) destination
    the shipper(seller)is paying for the shipping
  12. FOB(free on board) shipping point
    the buyer is paying for the shipping
  13. goods available for sale
    begining inventory + cost of goods purchased
  14. gross margin (gross profit)
    the difference between net sales & cost of goods sold
  15. invoice
    buyers & seller view point
  16. interest
    money paid for the use of money
  17. net purchases
    purchases minus purchase returns & allowance minus
  18. net sales
    sales minus sales returns & allowance minus sales discount
  19. purchase
    a temporary owner's equity account used to record the buying of merchandise for resale
  20. purchase order
    a written order by a buyer for merchandise or other property specified in the purchase requisition
  21. purchase requisition
    a form used to request the responsibile person or department to purchase merchandises or other property
  22. purchase journal
    a book of orginial entry used to record purchases of merchandise on credit only
  23. quick assets
    cash, marketble securities, accounts & notes receivable
  24. sales account
    a revenue account used to record sales of merchandise
  25. sales return
    a temporary's owner's equity contra sales account used to record credit given to a customer for shortages or damaged goods
  26. schedule of accounts payable
    an alphabetical or numerical listing of supplier accounts & balances
  27. summary posting
    posting the total of special columns in a journal at the end of the month
  28. trade discounts
    are reductions in the cost of goods
  29. number of days used in the bank's method?
Card Set
Exam 5
Study Guide