AJAX progress indicator
  • cash discount
    A reduction in invoice price offered to customers to encourage prompt payment of invoices
  • cost of goods sold
    The total cost attributed to units of inventory actually sold during a period
  • credit memorandum
    A seller-prepared document evidencing an approved return of merchandise for credit against an account
  • debit memorandum
    A purchaser-prepared document evidencing a return of merchandise to a seller
  • F.O.B. destination
    Free on Board destination; meaning the transfer of ownership of inventory will occur when the goods reach their destination and the seller will incur the freight charges
  • F.O.B. shipping point
    Free on Board shipping point; meaning the transfer of ownership of inventory will occur when the goods are shipped and the purchaser will incur the freight charges
  • goods available for sale
    A calculated amount corresponding to the beginning inventory plus net purchases; represents the total pool of inventory available during a period from which sales can occur
  • gross method
    A method of recording purchases of inventory at invoice price
  • gross profit
    A calculated amount corresponding to net sales minus cost of goods sold
  • inventory
    Goods held for resale to others
  • invoice price
    List price less any trade discounts
  • list price
    An established price determined by reference to a catalog or general price list; before any discounts
  • multiple-step income statement
    A complex income statement with sections that segregate cost of goods sold calculations and other components of income and expense; enables enhanced evaluations of data
  • net method
    A method of recording purchases of inventory at invoice price less available cash discounts
  • operating expenses
    General expense category for selling and administrative costs
  • periodic inventory system
    An inventory system that utilizes a Purchases account and does not update inventory with each sale; inventory is updated by physical count at the end of accounting periods
  • perpetual inventory system
    A "real-time" inventory system that updates inventory records with each purchase and sale
  • purchase discounts
    A cash discount available on purchases of merchandise on account; encourages prompt payment
  • sales discounts
    A cash discount offered to customers to encourage prompt payment of invoices
  • single-step income statement
    A simple income statement with a section for all revenues and another for all expenses; there is no direct association between specific revenue and expense components
  • trade discount
    A reduction from list price that is not entered in the accounting records; customarily offered in "setting" the invoice amount