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Merchandise - Good purchase to sell

Merchandising Business - Business purchase and resell


Retail Merchandising Business - MC Business that sell

to those who use or consume good

Whole Merchandising Business - Resell to other


Corporation - Legal rights of then person, Many may


Articles of Corporation - Legal document to define the


Charter - To act as a legal corporation

Capital - asset or financial resource

Share of stock - Ownership unit

Stockholder - Owner of stock

Capital Stock - Ownership in corporation

Vendor - business merchandise supply

Subsidiary Ledger - Ledger summarise single general

Sub-ledger - Subsidiary Ledger

Accts.Pay. Ledger - sub ledger contain vendor account

Controlling Account - summarise all account in a

subsidiary ledger

Cost of merchandise - Amount business pay for good

for sale


Requisition - Form of requesting purchase of

merchandise internal doc.

Purchase Order - Order to purchase

Purchase Invoice - invoice use for recording purchase

Term of Sale - Agreement between buyer and seller for


Due Date - Date invoice must be paid

N - Net

Purchase on Account - Purchase journal use to record

only purchase merchandise account

Purchase - For resale

Purchase on Account - Purchase to be paid later

Purchase Journal - For cash that not in journal

Special Journal - For one kind of transaction

- Purchase J.
:All purchase on account

- Cash Payment J.
:All cash payment

- Sales J.
: Sales on account

- Cash Recipe J.
:All cash recipe

- General J.
:For all Other Transaction

Inventory - list of asset contain individual items

any asset use for business

Merchandise Inventory - Good sale on to customer

Perpetual Inventory - Keep continued record going and

EX. 7-11, Makro

Periodic Inventory - Merchandise Inventory evaluated at

the end of fiscal period

EX. Factory, Farmer, Bakery

Physical Inventory - Periodic Inventory count by

measuring item, counting of merchandise on hand

1 Post entries in Journal

2 Post in purchase Account
3 Post total in special column in Accts. in Gl ledger

Cash Payment Journal - Payment transaction only

Retail Price - List Price

Trade Discount - reduction price for merchandise


- large order
Net Price - Price after the trade discount has been
deducted from he list price
Cash Discount - Deduction vendor allows on invoice
amount to encourage prompt payment

Trade Discount is for bulk

Cash Discount is for prompt Payment
Discount Period - Time customer may take cash

Purchase Discount - When company purchase

merchandise on account

Contra Account - Acc. reduce a related account on a

fiscal statement

Credit limit - Maximum outstanding balance allowed to

customer by a vendor

Schedule of Account Payable - list of account from

vendor balance and total amountmake sure that listing
of account and balance and amount are all equal

Selling price - Amount of a business receive from sale

of merchandise

Markup - Amount business adds to the cost of

merchandise to establish the selling price

Cost of Merchandise + Markup = Selling price( whatever

left over is profit )
Sales Tax - Tax on sales merchandise or service

Sales Journal - For recording

Sales invoice - Source document for sale on account

Charge Customer - who buys good for accts. rec.

Sales Merchandise - Merchandise business get revenue


POS. Point Of Sale - Computer use to collect store

report all information about transaction ( Electronic

Terminal Summary - Report that summarise cash and

credit card sales of point of sale Can be use for
summary document for sale

Cash Repents Journal - use to record cash recipe


Batch Report - Report of credit card sale product by

point of sale

Batching Out - process of preparing a batch report

Control Account - use to record balance of subsidiary

Depreciation - loosing / lowering a value of asset over time.

Current Asset - Asset and cash expected to be exchanged

or consumed

Plant Asset - Asset will be use for number of year in

operation( Fixed or Longterm)

Concept ; Match revenue with Expense must match the

cost of equipment over ten years.

Depreciation Expense - Portion of value that is lost or


Straight Line Method of Depreciation - A plant of asset

depreciated by an Equal amount in each year of its useful

Accumulated Depreciation - expense been record since the

purchase of plant asset

Book Value - Original cost minus accumulated depreciation

Accelerate Depreciation - Any method depreciation that

records greater depreciation expense in the early years
less depreciation expense in later year

Declining Balance of Depreciation - AC.DP. That multiplies

the book value of any asset by a constant depreciation rate
to determine annual depreciation

Double Declining balance of method depreciation - Decline

balance two times straight line
GAAP allowed to use any method how to appreciate but
need to be the same each year to year.

Tax authorities often have rules about how plant assets

can be appreciated

Why plant asset deprecated - to match revenue with

expense also lower the taxes payment. The asset isn’t
charged as an expense when it is brought or paid for
useful life

intangible Asset - Asset that does not have physical

substance Copyright, Trademark, Etc.

Amortisation - is a spreading of the cost of an intangible

asset over useful life - similar to depreciation for physical /
tangible asset.
Which do you use to calculate amortisation - Which ever
ends first

( Originalcost - Estimate Residual Value = Estimate

Amortisation. Expense )

( Estimate total Amortisation Expense / Year of

estimated useful life = Annual Amortisation. Expense )

Purchases Return - Credit allowance for the purchase

price returned merchandise result decreasing in
customer account payable to vendor

Purchase Allowance - Credit allowed for part of

merchandise that is not returned resulting in
decrease in the customer account payble to the

When might purchase Allowance

Debit Memorandum - Form prepared by customer for

an return

General Journal - for transaction that cant record in

special journal

After each journal is recorded the debit and credit are

Separated account will provide if information is
separated business will also can track the amount of

Budgeting - process of creating a plan to spend

money, The spending plan, Allows to determine in
advance in how much money you need, balance
future expense.

How to budget in collage?

Budgeting will help determine how much money you

need (Will and When) , Makes you aware of what you
spend your money on future and save money

Annual Budget / 12 x 5 = Budget to may 31

Forecast Budget amount Year to date spending 5 x 12

To calculate over spend (Different / Original ) =

Percentage increase

When might you give sell allowance?

- Inferior
- Incorrect Order
- Deliver Late

Credit Memorandum - Form prepared by vendor show

amount deducted returns and allowance
Debit Memorandum - Form by customer