Accounting 101 Chapter 7 Accounting for Sales, Accounts Receivable and Cash Receipts – Flashcards

A subsidiary ledger which contains customer's credit accounts

An account with a debit balance which is contrary to the normal balance for a revenue account. An example of a contra revenue account is the Sales returns and allowances accounts. This account is debited, rather than the sales account when an item is returned.

A physical note or printable electronic document verifying that a customer's account is to be credited. This document will have it's own unique number, and will state the customer account name, the dollar amount of the credit to be applied, and the reason for the credit (example: return of merchandise, or a sales allowance for services not performed fully) The memo will reference the original invoice or sales slip number that was issued at the point of sales, and will usually require a signature from management.

Rules for payment by buyer for items purchased on credit. n/30 means the balance on a particular invoice is due 30 calendar days from the day of purchase.

The established retail price.

A business that sells goods it has produced

A business that sells goods purchased for resale. Often a wholesaler that sells merchandise for a retailer to stock their stores.

The difference between the balance in the "Sales" account and the balance in the" Sales Returns and Allowances" account and the "Sales Discount" account.

A system that allows the sale of services or good with the understanding that payment will be made at a later date. Credit offered by the store itself, rather than by banks.

A business that sells directly to retail customers

A reduction in the price that was originally charged to the customer.

A contra revenue account where early payment discounts are recorded. If the terms for an invoice was set at 1/10, n/30, the customer is being offered a 1% discount for amounts on the invoice paid within 10 days of purchase, with the full amount due within 30 days of purchase. the 1% discount

A listing of all of the balances of the accounts in the accounts receivable subsidiary ledger

A business that sells services

A ledger separate from and subsidiary to the general ledger. Subsidiary ledgers are dedicated to accounts of a single type and show details to support a general ledger account. Two examples examples of subsidiary ledgers are the" accounts receivable" subsidiary ledger and the "accounts payable" subsidiary ledger.

A reduction (or series of reductions) from list price. These are usually given to modify a retail price to wholesale . If listed in a series, the first discount is taken off of list price, then the next discount is taken off of the remaining price. For example, if the list price is 1,000, and the stated trade discounts are 30 and 20 percent, the list price is first reduced by 30 percent (so balance= 700.) then 20 percent is taken off of that balance (700 -20%= 560). The

Debit to Cash; Credit to Sales

Debit

Revenue

True

Expenses

Credit