Acc 2 - Ch 8

special journal

A journal used for transactions that occur frequently and in the same manner.

subsidiary ledger

A ledger used to record details for specific general ledger accounts

net price method

A method used to record inventory purchases at the discounted price.

gross price method

A method used to record inventory purchases at the full price.

periodic inventory system

A system used by companies that need to determine the balance in inventory and the cost of goods sold only at specific points in time.

perpetual inventory system

A system used by companies that want to keep a running balance of the cost of inventory available for sale and the cost of goods sold during the period.

purchase discounts

A temporary account used to record purchase discounts taken.

purchases

A temporary account used to record purchases of inventory.

purchase returns and allowances

A temporary account used to record purchases returns and purchase allowances.

loss on inventory

A temporary account used to report losses of inventory. Discount Lost An account used under the net price method to record discounts lost.

merchandise Inventory

An inventory account used by a merchandising company.

direct materials inventory

An inventory account used in a manufacturing company to record the direct materials on hand.