| A | B |
|---|
| Contra account | an account that reduces a related account on a financial statement |
| Controlling account | an account in a general ledger that summarizes all accounts in a subsidiary ledger |
| Debit memorandum | a form prepared by the customer showing the price deduction for purchases returns and allowances |
| Departmental accounting system | an accounting system showing accounting information for two or more departments |
| Petty cash | an amount of cash kept on hand and used for making small payments |
| Credit memorandum | the source document prepared by the vendor showing the amount deducted for returns and allowances |
| Point-of-sale (POS) terminal | a computer used to collect, store, and report all the information of a sales transaction |
| Sales discount | a cash discount on sales |
| Terminal summary | the report that summarizes the cash and credit card sales of a point-of-sale terminal |
| Automatic check deposit | depositing payroll checks directly to an employee’s checking or savings account in a specific bank |
| Employee earnings record | a business form used to record details affecting payments made to an employee |
| Pay period | the period covered by a salary payment |
| Tax base | the maximum amount of earnings on which a tax is calculated |
| Withholding allowance | a deduction from total earnings for each person legally supported by a taxpayer |
| Component percentage | the percentage relationship between one financial statement item and the total that includes that item |
| Departmental margin | the revenue earned by a department less its cost of merchandise sold and less its direct expenses |
| Depreciation expense | the portion of a plant asset’s cost that is transferred to an expense account in each fiscal period during a plant asset’s useful life |
| Direct expense | an operating expense identifiable with and chargeable to the operation of a specific department |
| Dividends | earnings distributed to stockholders |
| Gross profit method of estimating an inventory | estimating inventory by using the previous year’s percentage of gross profit on operations |
| Indirect expense | an operating expense chargeable to overall business operations and not identifiable with a specific department |
| Periodic inventory | a merchandise inventory determined by counting, weighing, or measuring items of merchandise on hand |
| Perpetual inventory | a merchandise inventory determined by keeping a continuous record of increases, decreases, and balances on hand |
| Plant assets | assets that will be used for a number of years in the operation of a business |
| Voucher | a business form used to show an authorized person’s approval for a cash payment |
| Voucher check | a check with space for writing details about a cash payment |
| Voucher register | a journal used to record vouchers |
| Voucher system | a set of procedures for controlling cash payments by preparing and approving vouchers before payments are made |
| Consignee | the person or business that receives goods on consignment |
| Consignment | goods that are given to a business to sell but for which title remains with the vendor |
| Consignor | the person or business that gives goods on consignment |
| First-in, first-out inventory costing method | using the price of merchandise purchased first to calculate the cost of merchandise sold first |
| Last-in, first-out inventory costing method | using the price of merchandise purchased last to calculate the cost of merchandise sold first |
| Lower of cost or market inventory costing method | using the lower of cost or market price to calculate the cost of ending merchandise inventory |
| Merchandise inventory turnover ratio | the number of times the average amount of merchandise inventory is sold during a specific period of time |
| Retail method of estimating inventory | estimating inventory by using a percentage based on both cost and retail prices |
| Weighted-average inventory costing method | using the average cost of beginning inventory plus merchandise purchased during a fiscal period to calculate the cost of merchandise sold |
| Accounts receivable turnover ratio | the number of times the average amount of accounts receivable is collected during a specified period |
| Aging accounts receivable | analyzing accounts receivable according to when they are due |
| Allowance method of recording losses from uncollectible accounts | crediting the estimated value of uncollectible accounts to a contra account |
| Book value of accounts receivable | the difference between the balance of accounts receivable and its contra account, allowance for uncollectible accounts |
| Direct write-off method of recording losses from uncollectible accounts | recording uncollectible accounts expense only when an amount is actually known to be uncollectible |
| Uncollectible accounts | accounts receivable that cannot be collected |
| Writing off an account | canceling the balance of a customer account because the customer is not expected to pay |
