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comparable store sales

A comparison of sales figures at established stores with existing "track records." (Also called same-store sales.)

contra-revenue account

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

control account

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

cost of goods sold

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

gross profit

Net sales revenue minus the cost of goods sold.

gross profit margin

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

inventory

Merchandise intended for resale to customers.

inventory shrinkage

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

net sales

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

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

periodic inventory system

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

A system of accounting for merchandising transactions in which the Inventory and Cost of Goods Sold accounts are kept perpetually up-to-date.

point-of-sale terminals

Electronic cash registers used for computer-based processing of sales transactions.

sales per square foot of selling space

A measure of efficient use of available space.

special journal

An accounting record or device designed for recording large numbers of a particular type of transaction quickly efficiently. A business may use many different kinds of special journals.

subsidiary ledger

A ledger containing separate accounts for each of the of the items making up the balance of a control account in the general ledger. The total of the account balances in a subsidiary ledger are equal to the balance in the general ledger control account.

taking a physical inventory

The procedure of counting all merchandise on hand and determining its cost.

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