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Chapter 5 Accounting
Accounting
17
Accounting
Undergraduate 2
10/18/2012

Additional Accounting Flashcards

 


 

Cards

Term
Contra revenue account
Definition
An account that is offset against a revenue account on the income statement.
Term
Cost of goods sold
Definition
The total cost of merchandise sold during the period.
Term
Gross profit
Definition
The excess of net sales over the cost of goods sold.
Term
Gross profit rate
Definition
Gross profit expressed as a percentage by dividing the amount of gross profit by net sales.
Term
Net sales
Definition
Sales less sales returns and allowances and sales discounts.
Term
Periodic inventory system
Definition
An inventory system in which a company does not maintain detailed records of goods on hand and determines the cost of goods sold only at the end of an accounting period.
Term
Perpetual inventory system
Definition
A detailed inventory system in which a company maintains the cost of each inventory item and the records continuously show the inventory that should be on hand.
Term
Profit margin ratio
Definition
Measures the percentage of each dollar of sales that results in net income, computed by dividing net income by net sales.
Term
Purchase allowance
Definition
A deduction made to the selling price of merchandise, granted by the seller so that the buyer will keep the merchandise.
Term
Purchase discount
Definition
A cash discount claimed by a buyer for prompt payment of a balance due.
Term
Purchase invoice
Definition
A document that supports each purchase.
Term
Purchase return
Definition
A return of goods from the buyer to the seller for cash or credit.
Term
Quality of earnings ratio
Definition
A measure used to indicate the extent to which a company's earnings provide a full and transparent depiction of its performance; computed as net cash provided by operating activities divided by net income.
Term
Sales discount
Definition
A reduction given by a seller for prompt payment of a credit sale.
Term
Sales invoice
Definition
A document that provides support for each sale.
Term
Sales returns and allowances
Definition
Transactions in which the seller either accepts goods back from the purchaser (a return) or grants a reduction in the purchase price (an allowance) so that the buyer will keep the goods.
Term
Sales revenue
Definition
Primary source of revenue in a merchandising company.
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