audit your understanding (accounting chapter 10)

point-of-sale (POS) terminal

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

cash receipts journal

a special journal used to record only cash receipt transactions

List the five steps for posting transactions to accounts receivable ledger forms.

1. write the date 2.Write the sales journal page number in the Post. Ref. column of the ledger account. 3.Enter the debit and credit amounts. 4.Calculate and record the new account balance. 5.Write the customer account number in the Post. Ref. column of the sales journal.

Which accounts are impacted, and how, by the posting of the special columns of a sales journal?

1.Accounts Receivable is debited. 2.Sales is credited. 3.Sales Tax Payable is credited.

What are the two types of batch reports?

A batch report can be detailed, showing each credit card sale, or a summary of the number and total of sales by credit card type.

sales discount

A cash discount on sales taken by a customer

batch report

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

cash sale

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

What is the title of the general ledger account used to summarize the total amount due from all charge customers?

Accounts Receivable.

How are sales tax rates usually stated?

As a percent of sales.

How does a POS terminal determine the price of an item?

Before any sale is entered, the number, description, price, and quantity on hand of each item of merchandise are stored in the POS terminal.

What column on a general ledger form is not on an accounts receivable ledger form?

Credit Balance.

What is meant by 2/10, n/30 credit terms?

If a customer pays the amount owed within 10 days, the sales invoice amount is reduced 2%. Otherwise, the net amount is due in 30 days.

How are selling price and markup related?

Markup is the amount added to the cost of merchandise to set the selling price.

Why is sales tax collected considered a liability?

The amount of sales tax collected is a business liability until paid to the government.

batching out

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

terminal summary

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

What is the relationship between the accounts receivable ledger and its controlling account?

The total of the accounts in the accounts receivable subsidiary ledger equals the balance in the controlling account, Accounts Receivable.