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10 Cards in this Set
- Front
- Back
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Define: Debit Memorandum
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Issued by buyer when merchandise is being returned. Informs seller of credit being made to their account in the buyer's records.
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Define: Credit Memorandum
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Prepared to confirm a buyer's return or allowance of goods.
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Define: Credit Period
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Amount of time allowed before payment on invoice is due. Cash discounts may be granted during this period.
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Define: Credit Terms
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In the context of invoices, the time allowed to pay the bill. Example: n/10 EOM means net is due within 10 days after end of month. Or, n/30 means 30 days within invoice date.
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Define: Discount Period
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Period after invoice issued where buyer can receive a discount for paying quickly. Example: 2/10, n/60 means that 2% discount is available for 10 days, and entire invoice is due in 60 days.
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Define: FOB
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Free on Board. The point at which ownership for merchandise is transferred from seller to buyer.
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Define: EOM
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End of month.
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Define: Periodic Inventory System
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Inventory counts are done at the end of an account period. Gas stations usually do this.
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Define: Perpetual Inventory System
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System that continually updates inventory. Large retailers usually do this.
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Define: Acid-test Ratio
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Quick assets divided by current liabilities.
(Cash and Equivalents + Short Term Investments + Current Receivables) / Current Liabilities |
