Invoice
Collect payment after service
Receipt
Proof of payment by customer
Debit
Records incoming money
Credit
Records outgoing money
Markup
Amount required to cover operating expense and make profit
Markdown
Reduction in price
Cost of good
Retailer pays supplier/manufacturer for products
Selling price of goods
Customer pays retailer for goods
Discounts
Reduction to basic price
Trade discounts/ functional discounts
Discounts given to partners in distribution channel of goods and are given to distribution channel members to perform certain tasks
Cash discount
Discounts given to customers for paying with cash
Sales discount
Seller’s term for cash discount
Purchase discount
Buyer’s term for cash discount
Pay based on hourly wages
Pay is based on hours of work done
Pay based on Piece Work
Pay is based on acceptable pieces of work produced
Pay based on commission
Commission is a percentage of sales; usually paid to the person generating the sa
Net price
the value at which a product or service is sold after all taxes and other costs are added and all discounts subtracted.
Simple interest
Time is expressed in the same unit as the rate; if r is an annual rate, then t is in years
Unit price
the price for one item or measurement
Partial payment rule
Any partial loan payment is first used to pay the interest that has accrued (total interest to date), and the remainder is used to reduce the principal of the loan
Loan
a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
Interest
money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
Compound interest
Interest that is paid on both principal and interest accumulated from past periods; interest gained is added to original investment
Depreciation
Loss in value of tangible business assets or property (including land) over it's useful life due to deterioration, obsolescence,
Service hours method
Depreciation expense based on hours of useful service
Sum of years-digits method
Depreciation expense is greater for earlier years tnan for later years
Dealing balance method
Depreciation expense declines steadily over useful life of assets
Mortgage
a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.
Overhead costs
not directly related to the production of goods or services, but are necessary for the operation of a business (e.g rent, utilities, etc.)
Sales tax
Tax paid on purchase of most goods and services, it varies between states; collected by business and paid to state government
Revenue is the money a business earns by selling a product or service, and profit is the money your business keeps after accounting for all the expenses involved in generating that revenue.
How does revenue differ from profit?
Accounting
Information science that is used to collect & organize financial data for organizations and individuals
Bookkeeping
Type of accounting that is responsible that all info is collected and taken to consideration
Financial accounting
Type of accounting that focuses on 3 financial statement, creates annual resport
Managerial accounting
Type of accounting that deals with inside transactions. Isn’t defined by accounting principles and strategic info isn't visible by competitors. includes pricing, marginality
Tax accounting
Type of accounting that determines amount of taxes a company has to pay
Sales tax
Tax paid on purchase of most goods and services
Excise tax
Tax paid on specific goods and services
Property tax
Levied on the assessed value of property by local government