AJAX progress indicator
  • cash discountA reduction in invoice price offered to customers to encourage prompt payment of invoices
  • cost of goods soldThe total cost attributed to units of inventory actually sold during a period
  • credit memorandumA seller-prepared document evidencing an approved return of merchandise for credit against an account
  • debit memorandumA purchaser-prepared document evidencing a return of merchandise to a seller
  • F.O.B. destinationFree 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 pointFree 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 saleA 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 methodA method of recording purchases of inventory at invoice price
  • gross profitA calculated amount corresponding to net sales minus cost of goods sold
  • inventoryGoods held for resale to others
  • invoice priceList price less any trade discounts
  • list priceAn established price determined by reference to a catalog or general price list; before any discounts
  • multiple-step income statementA 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 methodA method of recording purchases of inventory at invoice price less available cash discounts
  • operating expensesGeneral expense category for selling and administrative costs
  • periodic inventory systemAn 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 systemA "real-time" inventory system that updates inventory records with each purchase and sale
  • purchase discountsA cash discount available on purchases of merchandise on account; encourages prompt payment
  • sales discountsA cash discount offered to customers to encourage prompt payment of invoices
  • single-step income statementA 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 discountA reduction from list price that is not entered in the accounting records; customarily offered in "setting" the invoice amount