Accounting 1: Chapter 15

Purchases Discount

Definition: a cash discount that suppliers frequently offer charge customers for early payment

Packaging Slip

Definition: a form that lists the items included in the shipment

Purchase Order

Definition: a written offer to a supplier to buy specified items

Purchase Requisition

Definition: a written request to order a specified item or items

Cost of Merchandise

Definition: contain the actual cost of the business of the merchandise sold to customers

Tickler File

Definition: has a folder for each day of the month

Purchases Allowance

Definition: occurs when a business keeps less than satisfactory merchandise and pays a reduced price

Purchases Return

Definition: occurs when a business returns merchandise to the supplier for full credit

Processing Stamp

Definition: placed on the invoice to enter the following information: the date the invoice is to be paid, the discount amount, if any, the amount to be paid, and the check number

Discount Period

Definition: the 10 days which is the time within which an invoice must be paid if the discount is taken

FOB Shipping Point

Definition: the buyer pays the shipping charge from the supplier's shipping point

Premium

Definition: the cost of insurance protection

Due Date

Definition: the date it is to be paid

FOB Destination

Definition: the supplier pays the shipping cost to the buyer's destination or location

Accounts Payable Subsidiary Ledger

Definition: this is set up when a business purchases from many suppliers on account with an account for each supplier or creditor

Debit Memorandum

Definition: used to notify suppliers (creditors) of a return or to request an allowance

Bankcard Fee

Definition: usually a percentage of the total of the amounts recorded on the bankcard sales slips processed

Purchases Account

Definition: where the cost of merchandise is recorded when a business buys merchandise to sell to customers