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Merchandise - Good purchase to sell

Merchandising Business - Business purchase and resell


good

Retail Merchandising Business - MC Business that sell


to those who use or consume good

Whole Merchandising Business - Resell to other


business

Corporation - Legal rights of then person, Many may


own

Articles of Corporation - Legal document to define the


corporation

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


ledger
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

(CoGS)

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


merchant

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

5 JOURNALS
- 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
Going

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


business

- 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
discount

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


from

POS. Point Of Sale - Computer use to collect store


report all information about transaction ( Electronic
Trans

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


journal

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


account
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


Deduct

Straight Line Method of Depreciation - A plant of asset


depreciated by an Equal amount in each year of its useful
life

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
vendor

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


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

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