Accounting 1 Spring final review vocab

A method of paying an employee based on the amount of sales the employee generates.

Commission

An organization with the legal rights of a person which many persons or other corporations may own.

Corporation

9. Earnings distributed to stockholders.

Dividends

A federal tax paid for hospital insurance.

Medicare tax

3. A subsidiary ledger containing all accounts for charge customers.

accounts receivable ledger

6. A legal document that identifies basic characteristics of a corporation

articles of incorporation

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

batch report

10. The process of preparing a batch report from a point-of-sale terminal.

batching out

3. A group of persons elected by the stockholders to govern a corporation.

board of directors

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

markup

The total earnings paid to an employee after payroll taxes and other deductions.

net pay

11. A merchandise inventory evaluated at the end of a fiscal period.

periodic inventory

14. An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.

perpetual inventory

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

point-of-sale (POS) terminal

15. A form requesting that a vendor sell merchandise to a business.

purchase order

1. Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's account payable to the vendor.

purchases allowance

6. Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's account payable to the vendor.

purchases return

A retirement plan approved by the Internal Revenue Service

qualified retirement plan

A merchandising business that sells to those who use or consume the goods.

retail merchandising business

11. An amount earned by a corporation and not yet distributed to stockholders.

retained earnings

10. . Credit allowed to a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the accounts receivable of the merchandising business.

sales allowance

12. A cash discount on a sale taken by the customer.

sales discount

5. A special journal used to record only sales of merchandise on account.

sales journal

7. Credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business.

sales return

4. A tax on a sale of merchandise or services.

sales tax

20. A listing of vendor accounts, account balances, and the total amount due to all vendors.

schedule of accounts payable

13. A listing of customer accounts, account balances, and total amount due from all customers.

schedule of accounts receivable

1. The amount a business receives from the sale of an item of merchandise.

selling price

Each unit of ownership in a corporation

share of stock

A federal tax paid for old-age, survivors, and disability insurance.

social security tax

16. A journal used to record only one kind of transaction.

special journal

The maximum amount of gross earnings on which a tax is calculated.

tax base

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

terminal summary

10. An agreement between a buyer and a seller about payment for merchandise.

terms of sale

9. A reduction in the list price granted to a merchandising business.

trade discount

. A business that buys and resells merchandise primarily to other merchandising businesses.

wholesale merchandising business

A deduction from total earnings for each person legally supported by a taxpayer, including the employee.

withholding allowance

8. The retail price listed in a catalog or on an Internet site.

list price

A qualified retirement plan sponsored by an employer.

401(k)

13. A form requesting the purchase of merchandise.

Requisition

A qualified retirement plan that allows tax-free withdrawals from the account.

Roth individual retirement account

5. The owner of one or more shares of stock.

Stockholder

17. A deduction that a vendor allows on an invoice amount to encourage prompt payment.

cash discount

11. A special journal used to record only cash receipt transactions.

cash receipts journal

6. A sale in which the customer pays for the total amount of the sale at the time of the transaction.

cash sale

12. An account that reduces a related account on a financial statement.

contra account

7. An account in a general ledger that summarizes all accounts in a subsidiary ledger.

controlling account

19. The maximum outstanding balance allowed to a customer by a vendor.

credit limit

2. A form prepared by the vendor showing the amount deducted for returns and allowances.

credit memorandum

8. A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance.

debit memorandum

4. Action by a board of directors to distribute corporate earnings to stockholders.

declaring a dividend

The payment of an employee's net pay using electronic funds transfer.

direct deposit

A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.

electronic funds transfer

18. A journal amount column that is not headed with an account title.

general amount column

5. A journal with two amount columns in which all kinds of entries can be recorded.

general journal

A qualified retirement plan that provides most individuals with a deferred federal income tax benefit.

individual retirement account