Busy. Please wait.
Log in with Clever

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever

Username is available taken
show password

Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Didn't know it?
click below
Knew it?
click below
Don't Know
Remaining cards (0)
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Accounting Ch.5

Service Business? Fees Earned-Operating Expenses=Net income
Merchandising Business? Sale-Cost of Merchandise=Gross Profit Gross Profit-Operating Expenses=Net Income
Gross Profit Formula? Sales-Cost of Merch. Sold=Gross Profit
Net Income Formula? Gross Profit-Operating Expenses=Net Income
The Operating Cycle? Cash->Purchase Activity->Products->Sales Activity->Accts. Receivable->Collection Activity->Cash
Periodic Inventory System? Merchandise Inventory at the end of the period is determined by taking a physical count of inventory on hand.
Perpetual Inventory System? Amounts of inventory purchased, for sale, and sold are continuously updated in the inventory records.
Purchase Discounts? Buyer may receive a discount from the seller for early payment of amount owed.
Purchase Return? Actually returning merchandise that is damaged or does not meet the specifications of the orders. A.K.A=Allowances
Debit Memo? Informs the seller of the amount the buyer proposes to debit to the account payable due the seller.
Credit Memo? Authorizes a credit to (decrease) the buyers acct.receivable.
Free on Board (FOB) Shipping Point? If ownership of the merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.
FOB Destination? If ownership of the merchandise passes to the buyer when the buyer receives the merchandise.
FOB Shipping Point Illustration? Seller->Title passes to Buyer->Freight->Buyer=Buyer pays Freight
FOB Destination? Seller->Freight->Freight->Title passes to Buyer->Buyer=Seller Pays Freight
Trade Discounts When wholesalers offer special discounts to certain classes of buyers who order large quantities
Sales? Total amount charged customers for merchandise sold, including cash sales and sales on account.
Net Sales? Net Sales=Sales-Sales Returns-Allowances-Sales Discounts
Account Form Balance Sheet? Assets on left side, liabilities and owner's equity on right
Report Form Balance Sheet? Sheet is prepared in a downward sequence in three sections.
Inventory Shrinkage/Shortage? Loss of inventory due to theft.
Ratio of Net Sales to Assets? Measures how effectively a business is using its assets to generate sales.
Ratio of Net Sales to Assets Formula? Ration of Net Sales=Net Sales/Avg. Total Assets
Purchases? Purchases of inventory are recorded in the Purchases Account rather than in the Merchandise Inventory Account.
Created by: Mheath27
Popular Accounting sets




Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
restart all cards