Purchase Power
Recording
Transactionstegory
Freight and Discounts
Cost of Goods Sold
Posting and Schedules
100
Refers to merchandise acquired for resale.
What is the definition of "purchases" in a merchandising business?
100
The account that is always debited when acquiring merchandise for resale (in this class). ***DAILY DOUBLE***
What is the Purchases account?
100
The definition of the term FOB.
What is Free on Board? (not freight on board like it seems like it ought to be)
100
The term for the result of calculating the price of merchandise purchased for resale, including freight charges, and discounts and returns, if applicable and the effect of changes in the merchandise inventory account. ****TRIPLE DOUBLE*****
What is Cost of Goods Sold?
100
A schedule listing a companies vendors and how much is owes to each one and the toal amount owed.
What is a Schedule of Accounts Payable?
200
A business that acquires products and resells them such as a retail or wholesale operation.
What is a merchandising business anyway?
200
A contra-cost account that offsets the Purchases account and is used to record merchandise that has been returned to a vendor.
What is Purchases Returns and Allowances?
200
The term used when the buyer is paying the freight (shipping) charges.
What is FOB shipping point? (legal title for the goods also passes to the buyer...ask me about this)
200
The term for the amount when Cost of Goods Sold is subtracted form Net Sales.
What is Gross Profit?
200
After journalizing purchase transactions this process is performed to both the general ledger and to specific vendors.
What is the posting process?
300
Records the receipt of merchandise.
What is a receiving report?
300
Used when regarding a reduction in payment due to early payment of an invoice.
What is the Purchases Discounts account?
300
The term used when the freight (shipping) charges are paid by the seller.
What is FOB destination?
300
When inventory is counted at the end of the period the total amount is factored into the Cost of Goods Sold (COGS) calculation in the way.
What is subtracted? (ask me about this)
300
The total of the schedule of accounts payable (vendor ledger) should agree with the balance in this general ledger account after posting is completed. **DAILY DOUBLE**
What is Accounts Payable?
400
A form used to request the purchase of merchandise (or other property).
What is a purchase requisition?
400
The account used when recording payment for the cost of having merchandise delivered.
What is the Freight-In account?
400
The account that is a trade discount recorded in.
What is none? (trade discounts are calculated and the transaction is recorded in the purchases account after the price reduction has been taken off the total)
400
What you start with plus what you buy minus what you've got left is a common sense way of thinking about this term. **DAILY DOUBLE**
What is Cost of Goods Sold?
400
If a ransaction involves a vendor how often should the transaction be posted to the Accounts Payable Ledger (Vendor Ledger)?
What is daily?
500
A written order to by goods from a specific vendor (supplier).
What is a purchase order?
500
Always placed after Accounts Payable when recording the purchase of merchandise on credit. ***DAILY DOUBLE***
What is the vendor name?
500
The method of showing that a 2% discount is offerred for paying an invoice within 10 days of the invoice date. (see chapter 10)
What is 2/10, n30?
500
This is so important in a merchandising business that it will surely be on your mid term exam and probably on the final exam also so you've just got to learn how to do it.
What is the Cost of Goods Sold and Gross Profit calculation on the Income Statement?
500
This is placed next to the general ledger account number (after a slash) on the journal page to indicate that the transaction has also been properly posted to the Accounts Payable Ledger (vendor ledger).
What is a check mark?
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