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22 Cards in this Set
- Front
- Back
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contra revenue account |
An account that is offset against a revenue account on the income |
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cost of good sold |
the total cost of merchandise sold during the period |
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FOB destination |
freight terms indicating that the seller places the goods free on board to the buyers place of business and the seller pays the freight |
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FOB shipping point |
freight terms indicating that the seller places goods free on board to the buyers place of business and the buyer pays freight costs |
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gross profit |
the excess of net sales over the cost of goods sold |
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Multi step income statement |
an income statement that shows several steps in determing net income |
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Net sales |
sales revenue less sales returns and allowances and less sales discounts |
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operating expenses |
expenses incurred in the process of earning sales revenue |
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income for operations |
income from a companies principal operating activity determined by subtracting cost of goods sold and operating expenses from net sales |
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Periodic inventory system |
an inventory system under which the company does not keep detailed inventory records throughout the accounting period but does determine the cost of goods sold only at the end of an accounting period |
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perpetual inventory system |
an inventory system under which the company keeps detailed records of the cost of each inventory purchase and sale and the records continiously show the inventory that should be on hand |
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purchase allowance |
a deduction made to be the selling price of the merchandise granted by the seller so that the buyer will keep the merchandise |
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purchase discount |
a cash discount claimed by a buyer for prompt payment of a balance due |
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purchase invoice |
a document that supports each credit purchase |
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purchase return |
a return of goods from the buyer to the seller for a cash or credit refund |
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sales discount |
a reduction given by the seller for prompt payment of a credit sale |
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sales invoice |
a document that supports each credit sale |
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sales returns and allowances |
purchase returns and allowances from the sellers perspective |
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sales revenue (sales) |
the primary source of revenue in a merchandise company |
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single step income system |
an income statement that shows only one step in determining net income |
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gross profit rate |
gross profit expressed as a percentage by dividing the amount of gross profit by net sales |
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non operating activities |
various revenues, expenses, gains, and losses that are unrelated to a companies main line of operations |
