If the Accounts Receivable account increased during an accounting period, then cash received is greater than sales recorded for that same period.

Quick assets include cash, inventory, and current receivables.

The gross margin ratio is defined as gross profit divided by net sales.

Credit terms refer to the specifics of the amounts and timing of payments between a buyer and a seller.

FOB shipping point (or FOB factory) implies that ownership of goods transfers to the buyer at the buyer's place of business.

Each sales transaction of a seller that uses a perpetual system involves recognizing both revenue and cost of goods sold.

When a credit customer returns merchandise the seller would debit Sales Returns and Allowances and credit Accounts Receivable.

Goods available for sale consists of net purchases and the beginning inventory.

In a periodic inventory system, cost of goods sold is recorded as each sale occurs.

A properly designed internal control system is a key part of accounting information systems design, analysis, and performance.

Maintaining adequate records is an important internal control principle.

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Separation of duties reduces the risk of error and fraud.

A complete set of financial statements must include the statement of cash flows, which reports on the changes in cash.

The payee is the person who signs a check, authorizing its payment.

Internal control for banking activities include signature cards, deposit tickets, checks, and bank statements.

Internal control of cash receipts aims to ensure that all cash received is properly recorded and deposited.

The Petty Cash account is a separate checking account used for small amounts.

All monies disbursed from petty cash should be documented by a petty cash receipt/voucher.

The petty cash fund should at least be reimbursed at the end of each period.

A petty cash fund is also called an imprest fund.

The entry to increase the balance in petty cash would include a debit to Petty Cash.

A bank reconciliation usually yields an adjusted bank balance as well as an adjusted book balance.

Factors that cause the bank statement balance for a checking account to be different from the company's checking account balance include: outstanding checks, deposits in transit, deductions for bank fees, additions for interest, and errors.

The net method for recording purchases records the purchase invoice at its net amount after recognizing the cash discount.

The Discounts Lost account represents the savings earned in taking advantage of purchase discounts.