Flashcards
Chapter 7 and 8 key terms
Cards in this deck (41)
- 1Cash DiscountSavings that result from early payment by taking advantage of discounts offered by the seller; discount is not taken on freight or taxes.
- 2Chain DiscountsTwo or more trade discounts that are applied to the balance remaining after the previous discount is taken.
- 3Complement100% less the stated percent
- 4Credit PeriodCredit days are counted from date of invoice.
- 5Discount PeriodAmount of time to take advantage of a cash discount.
- 6Due Datesmaturity date, or when the note will be repaid.
- 7End of Credit PeriodLast day from date of invoice when customer can take cash discount
- 8End of MonthCash discount period begins at the end of the month invoice is dated. After the 25th discount period, one additional month results.
- 9FOB DestinationSeller pays cost of freight in getting goods to buyer's location.
- 10FOB Shipping pointBuyer pays cost of freight in getting goods to his location.
- 11Freight TermsDetermine how freight will be paid. Most common freight terms are FOB shipping point and FOB destination.
- 12invoiceDocument recording purchase and sales transactions.
- 13List PriceSuggested retail price paid by customers.
- 14Net PriceList price less amount of trade discount. The net price is before any cash discount.
- 15Net Price Equivalent RateWhen multiplied times the list price, this rate or factor produces the actual cost to the buyer. Rate is found by taking the complement of each term in the discount and multiplying together.
- 16Ordinary DatingCash discount is available within the discount period. Full amount due by end of credit period if discount is missed.
- 17Receipt of GoodsUsed in calculating the cash discount period; begins the day that the goods are received
- 18Series DiscountsTwo or more trade discounts that are applied to the balance remaining after the previous discount is taken.
- 19Single Equivalent Discount RateRate or factor as a single discount that calculates the amount of the trade discount by multiplying the rate times the list price. This single equivalent discount replaces a series of chain discounts. The single equivalent rate is 1- net price equivalent rate.
- 20Single Trade discountCompany gives only one trade discount
- 21Terms of the SalwCriteria on invoice showing when cash discounts are available, such as rate and time period.
- 22Trade discountReduction off original selling price not related to early payment.
- 23Trade discount amountList price less net price
- 24Trade Discount rateTrade discount amount given in percent
- 25Breakeven pointPoint at which seller has covered all expenses and costs and has made no profit or suffered a loss.
- 26Contribution MarginDifference between selling price and variable cost.
- 27CostPrice retailers pay to manufacturer or supplier to bring merchandise into store.
- 28Dollar Markdownoriginal selling price less the reduction to price. Markdown may be stated as a percent of the original selling price. Ex. Dollar Markdown/ Original selling price.
- 29Dollar MarkupSelling price less cost. Difference is the amount of the markup. Markup is also expressed in percent
- 30Fixed CostrCosts that do not change with increase or decrease in sales.
- 31Gross ProfitDifference between cost of bringing goods into the store and selling price of the goods.
- 32MarginDifference between cost of bringing goods into store and selling price of goods.
- 33MarkdownsReductions from original selling price caused by seasonal changes, special promotions, and so on.
- 34MarkupAmount retailers add to cost of goods to cover operating expenses and to make a profit
- 35Net ProfitGross profit - operating expenses
- 36Operating expensesRegular expenses of doing business. These are not costs.
- 37Percent Markup on COstDollar markup divided by the cost; thus, markup is a percent of the cost
- 38Percent markup on selling priceDollar markup divided by the selling price; thus, markup is a percent of the selling price.
- 39PerishablesGoods or services with a limited life.
- 40Selling PriceCost plus markup equals selling price
- 41Variable CostCosts that do change in response to change in volume of sales
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- Flashcards on Chapter 7 and 8 key terms, created by Jared Beaver on 10/09/2023.
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- Jared Beaver
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