Chapter 10 Accounting Vocab and Multiple Choice

selling price

the amount a business receives from the sale of an item of merchandise

markup

the amount a business adds to the cost of merchandise to arrive at the selling price

sales tax

a tax on sale of merchandise or services

Sales journal

a special journal used to record only sales of merchandise on account

cash sale

a sale in which customer pays for the total amount of the sale at the time of the transaction

point of scale(POS) terminal

a specialized computer used to collect, store, and report all the information about a sales transaction

terminal summary

the report that summarizes the cash and credit card sales of a point-of-sale terminal

batch report

a report of credit card sales produced by a point-of-sale terminal

batching out

the process of preparing a batch report from a point-of-sale terminal

cash receipts journal

a special journal used to record only cash receipt transactions

sales discount

a cash discount on a sale taken by the customer

schedule of accounts receivable

a listing of customer accounts, account balances, and total amount due from all customers

When merchandise is sold on account and sales tax is also credited,

the accounts receivable balance is increased.

Marris Company records a $1,000.00 sale on account on May 23. On June 6, the customer pays the account. The sale should be recorded in the

sales journal on May 23.

For a sale on account of $1000.00 plus tax of $80.00, the amount recorded in the Accounts Receivable amount column of a sales journal is

$1,080.00

The amount of sales tax on a sale is calculated as the price of goods

times the sale tax rate

A business should post sales on account transactions to the accounts receivable subsidiary ledger frequently to

ensure each customer account will show an up to date balance

The amount of cash received for a sale on account of $1,080.00 when the cash is received within the 2% discount period is

$1,058.40

Most businesses receive cash for credit and debit card sales

within 2-3 days after batching out.

Credit terms of 2/10, n/30 mean that if the account is paid in

2 days, a 10% discount will be allowed