| A | B |
|---|
| Credit terms | Terms that state the time allowed for payment for a sale on account |
| Cost of merchandise | the actual cost to the business of the merchandise sold to a customer |
| Sales journal | a special journal used to record only the sale of merchandise on account. |
| Cash receipts journal | A special journal used to record all transactions in which cash is received. |
| Purchases journal | A special journal used to record all transactions in which items are bought on account. |
| Cash payments journal | A special journal used to record all transactions in which cash is paid out or decreased. |
| Adjusting entries | journal entries that update the general ledger accounts at the end of a period. |
| Closing entries | journal entries made to close or reduce to zero, the balances in the temporary accounts and to transfer the net income or net loss for the period to the capital account. |
| Vertical analysis | A method of analysis that expresses financial statement items as percentages of a base account. |
