comparable store sales (pg. 265)

contra-revenue account

(p. 262)

A debit balance account that is offset against revenue in the income statement. Examples include Sales Discounts and Sales Returns and Allowances.

control account

(pg. 250)

A general ledger account that summarizes the content of a specific subsidiary ledger.

cost of goods sold

(pg. 249)

 The cost to a merchandising company of the goods it has sold to its customers during the period.

gross profit

(pg. 250)

Net sales revenue minus the cost of goods sold.

gross profit margin

(pg. 265)

Gross profit expressed as a percentage of net sales. Also called gross profit rate.

inventory

(pg. 248)

Merchandise intended for resale to customers.

inventory shrinkage

(pg. 253)

The loss of merchandise through such causes as shoplifting, breakage, and spoilage.

net sales

(pg. 262)

Gross sales revenue less sales returns and allowances and sales discounts. The most widely used measure of dollar sales volume; usually the first figure shown in an income statement.

operating cycle

(pg. 248)

The repeating sequence of transactions by which a business generates its revenue and cash receipts from customers.

periodic inventory system

(pg. 254)

An alternative to the perpetual inventory system. It eliminates the need for recording the cost of goods sold as sales occur. However, the amounts of inventory and the cost of goods sold are not known until a complete physical inventory is taken at year-end.

perpetual inventory system

(p. 251)

A system of accounting for merchandising transactions in which the Inventory and Cost of Goods and