Financial Accounting 1 - Final Exam Vocab Words

Accounts receivable ledger

A subsidiary ledger that contains credit customer accounts

Charge-account sales

Sales made through the use of open-account credit or one of the various types of credit cards

Contra revenue account

account with debit balance, contrary to normal balance for a revenue account

Control account

An account that links a subsidiary ledger and the general ledger since its balance summarizes the balance of the accounts in the subsidiary ledger

Credit memorandum

A note verifying that a customer's account is being reduced by the amount of sale returns or sales allowance plus any sales tax that may have been involved

Invoice

A customer billing for merchandise bought on credit

List price

An established retail price

Manufacturing business

A business that sells goods that it has produced

Merchandise inventory

stock of goods a merchandising business keeps on hand

Merchandising business

A business that sells goods purchased for resale

Net price

The list price less all trade discounts

Net sales

The difference between the balance in the SALES account and the balance in the Sales Returns and Allowances account

Open-account credit

A system that allows the sale of services or goods with the understanding that payment will be made at a later date

Retail business

A business that sells directly to individual customers

Sales allowance

A reduction in the price originally charged to customers for goods or services

Sales journal

A special journal used to record sales of merchandise on credit

Sales return

A firm's acceptance of a return of goods from a customer

Sales Returns and Allowances

A contra revenue account where sales returns and sales allowances are recorded; sales returns and allowances are subtracted from sales and determine net sales

Schedule of accounts receivable

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

Service business

A business that sells services

Special journal

A journal used to record only one type of transaction

Subsidiary ledger

A ledger dedicated to accounts of a single type and showing details to support a general ledger account

Trade discount

A reduction from list price

Wholesale business

A business that manufactures or distributes goods to retail business of large customers such as hotels and hospitals