25 terms

Accounting Chp 10:1-3 Terms Review & Audit Your Understanding

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Terms in this set (...)

Customer
A person or business to whom a merchandise or services are sold
Sales Tax
A tax on a sale of merchandise or services
Sales Journal
A special journal used to record only sales of merchandise on account
Cash Sale
A sale in which cash is received for the total amount of the sale at the time of the transaction
Credit Card Sale
A sale in which a credit card is used for the total amount of the sale at the time of transaction
Point-of-sale
A computer used to collect, store, and report all the information of a sales transaction
Terminal Summary
The report that summarizes the cash and credit card sales of a point-of-sale terminal
Batch Report
A report of credit card sales by a point-of-sale terminal
Batching Out
The process of preparing a batch report of credit card sales from a point-of-sale terminal
Cash Receipts Journal
A special journal used to record only cash receipts
Sales Discount
A cash discount on sales taken by a customer
Sales Return
Credit allowed for a customer for the sales price of returned merchandise, resulting in a decrease in the vendor's accounts receivable
Sales Allowance
Credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable
Credit Memorandum
A form prepared by the vendor showing the amount deducted for the returns and allowances
How does a merchandising business differ from a service business?
A merchandising business focuses on purchases and sales of merchandise
A service business focuses on services sold
How are sales tax rates usually stated?
A sales tax rate is usually stated as a percentage
Why is sales tax collected considered a liability
A sales tax is collected is considered a liability because it increases the amount to be collected later from a customer
What is the title of the general ledger account used to summarize the total amount due from all charge customers?
Accounts Receivable
What is the difference in the receipt received by a customer from a cash register versus a point-of-sale terminal?
From a cash register we get the total of the sale
A point-of-sale terminal provides you the information about what merchandise was sold, when it was sold, and to which customers
What are the two types of batch reports?
The two types of batch reports are summary reports and credit card sales
Who transfers funds between banks involved in the credit card sales?
The nearest Federal Reserve Bank transfers the funds
What is the difference between a sales return and a sales allowance?
A sales return is credit allowed for a customer for the sales price of returned merchanidise, resulting in a decrease in the vendor's accounts receivable
A sales allowance is credit allowed for a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable
What is the source document for journalizing sales returns and allowances?
Credit memorandum
What general ledger accounts are affected, and how, by a sales returns and allowances transaction?
Sales returns and allowances decrease the amount of sales
Why are sales returns and allowances not debited to the Sales account?
Because by debiting sales returns and allowances, it enables management to quickly identify if the amount of sales returns and allowances compared to sales is greater than expeceted