Shared Flashcard Set

Details

Principles of Financial Accounting
Chapter 6
21
Accounting
Undergraduate 2
02/16/2011

Additional Accounting Flashcards

 


 

Cards

Term
Cost of goods available for sale
Definition
The sum of beginning inventory and the net cost of purchases during an accounting period.
Term
Delivery Expense
Definition
The transportation cost of delivering merchandise.  Also called freight-out.
Term
Exhange gain or loss
Definition
A gain or loss due to exchange rate fluctuation, which is reported on the income statement.
Term
Financing Period
Definition
The amount of time from the purchase of inventory until it is sold and payment is collected, less the amount of time creditors give the company to pay for the inventory.
Term
FOB Destination
Definition
A term indicating that the seller retains title to the merchadise until it reaches its destination and that the seller bears the shipping costs.
Term
FOB shipping point
Definition
A term indicating that the buyer assumes title to the merchandise at the shipping point and bears the shipping costs.
Term
Freight-In
Definition
The transportation cost of receiving merchandise.
Term
Merchandise Inventory
Definition
The goods on hand at any one time that are available for sale to customers.
Term
Merchadising business
Definition
A business that earns income by buyng and selling goods.
Term
Net cost of purchses
Definition
Net purchases plus any freight charges on the purchases.
Term
Net purchases
Definition
Total purchses less any deductions, such as purchases returns and allowances and discounts on purchases.
Term
Operating cycle
Definition
A series of transactions that includes purchases of merchandise inventory for cash or on credit, payment for puchases made on credit, sales of merchandise inverntory for cash or on credit, and collection of cash from credit sales.
Term
Periodic inventory system
Definition
A system for determining inventory on hand by periodically taking a physical count.
Term
Perpetual Inventory System
Definition
A system for determining inventory on hand by keeping continous records of the quantity and, usually, the cost of individual items as they are bought and sold.
Term
Purchases account
Definition
A temporary account used under the periodic inventory system to accumulate the cost of merchandise purchased for resale during an accounting period.
Term
Purchases discounts
Definition
Discounts that buyers take for early payment of merchadise; the Purchases Discounts acccount is a contra-purchases account used under the perodic inventory system.
Term
Purchases Returns and Allowances account
Definition
A contra-purchases account used under the periodic inventory system to accumulate cash refunds, credits on account, and other allowances made by suppliers.
Term
Sales Discount
Definition
A discount given to a buyer for early payment of a sale made on credit; the Sales Discounts account is a contra-revenue account.
Term
Sales Returns and Allowances account
Definition
A contra-revenue account used to accumulate cash refunds, credits on account, and other allowances made to customers who have received defective or otherwise unsatisfactory products.
Term
Trade discount
Definition
A deduction (usually 30 percent or more) off a list or catalogue price, which is not recorded in the accounting records.
Supporting users have an ad free experience!