6-Merchandising Activities
Vocabulary from the 6th chapter of "Financial Accounting" 13th edition Williams Haka Bettner Carcello
Terms
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- Gross profit
- Net sales revenue minus th cost of goods sold.
- Subsidiary ledger
- A ledger containing separate accounts for each of the items making up the balance of a control account in the general ledger. The total of the account balances in the subsidiary ledger are equal to the balance in the general ledger control account.
- Inventory
- Merchandise intended for resale to customers
- Taking a physical inventory
- The procedure of counting all merchandise on hand and determining its cost.
- Perpetual Inventory System
- A system of accounting for merchandising transactions in which the inventory and Cost of Good Sold accounts are kept perpetually up-to-date.
- Net Sales
- Gross sales revenue less sales returns and allowances and sales discounts. The most widely used measure of dollar sales volume; usually the first figure shown in an income statement.
- Operating Cycle
- The repeating sequence of transactions by which a business generates its revenue and cash receipts from customers.
- Cost of Goods Sold
- The cost to a merchandising company of the goods it has sold to its customers during the period.
- Inventory shrinkage
- The loss of merchandise through such causes as shoplifting, breakage, and spoilage.
- Gross Profit Margin
- Gross profit expressed as a percentage of net sales. Also called gross profit rate.
- Special Journal
- An accounting record or device desinged for recording large numbers of a particular tyle of transaction quickly and efficiently. A business may use many different kinds of special journals.
- Periodic inventory system
- An alternative to the perpetual inventory system. It eliminates the need for recording the cost of goods sold as sales occur. However, the amounts of inventory and the cost of goods are not known until a complete physical inventory is taken at year-end.
- Comparable Store Sales
- A comparison of sales figures at established stores with existing 'track records' (also called same-store sales).
- Control account
- A general ledger account that summarizes the content of a specific subsidiary ledger.
- Point-of-sale (POS) terminals
- Electronic cash registers used for computer-based processing of sales transactions. The POS termnal identifies each item of merchandise from it's bar code and then automatically records the sale and updates the computer-based inventory records. These terminals permit the use of perpetual inventory systems in many businesses that sell a high volume of low-cost merchandise.
- Contra-revenue accounts
- A debit balance account that is offset against revenue in the income statement. Examples include Sales Discounts, and Sales Returns and Allowances.
- Sales per square foot of selling space
- A measure of efficient use of available space.