Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
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
Normal Size Small Size show me how
ACC201 ch5
| Question | Answer |
|---|---|
| Note that the added asset account for a merchandising company is the ___ Companies report inventory as a ___ on the balance sheet. | Inventory account, current asset |
| Under a perpetual inventory system, a company determines the cost of goods sold ___ | each time a sale occurs. |
| In a periodic inventory system, companies do not keep detailed inventory records of the goods on hand throughout the period. Instead, they ___ | determine the cost of goods sold only at the end of the accounting period |
| not all purchases are debited to inventory. What are some items what wont be debited to inventory? | supplies, equipment, and similar items, as increases to specific asset accounts rather than to Inventory. |
| FOB shipping point means that ___ | the buyer pays the freight costs. |
| FOB destination means that ___ | the seller pays the freight. |
| When the buyer incurs the transportation costs, these costs are considered part of the cost of purchasing inventory. Therefore, the buyer ___ the Inventory account. | debits (increases) |
| Freight costs incurred by the seller on outgoing merchandise are an ___ to the seller. These costs increase an ____ account. | operating expense, expense account titled Freight-Out (sometimes called Delivery Expense). |
| The credit terms of a purchase on account may permit the buyer to claim a cash discount for prompt payment. The buyer calls this cash discount a ___ | purchase discount. |
| ____ specify the amount of the cash discount and time period in which it is offered. They also indicate the time period in which the purchaser is expected to pay the full invoice price. | Credit terms |
| What is an invoice? | an itemized list of goods shipped usually specifying the price and the terms of sale : bill |
| When the buyer pays an invoice within the discount period, the amount of the discount ___ Inventory. | decreases |
| When they buyer pays an invoice within the discount period, why does the amount of the discount decrease inventory? | Because companies record inventory at cost and, by paying within the discount period, the buyer has reduced its cost. |
| Sales Returns and Allowances is a ___ account to Sales Revenue) | contra |
| Like Sales Returns and Allowances, Sales Discounts is a ___ account to Sales Revenue. | contra revenue |
| The multiple-step income statement begins by presenting___. It then deducts ___from sales revenue to arrive at net sales. | sales revenue, contra revenue accounts—sales returns and allowances, and sales discounts |
| GPR (growth profit rate) equation | Gross Profit÷Net Sales=Gross Profit Rate |
| comprehensive income. Examples of such items include certain adjustments to____, gains and losses on ____, and unrealized gains and losses on certain types of___ | pension plan assets, foreign currency translation, investments |
| The major difference between the balance sheets of a service company and a merchandiser is ___. | inventory |
| Periodic system, the company performs a count to determine the ending balance of inventory. It then calculates cost of goods sold by ___ | subtracting ending inventory from the cost of goods available for sale |
| Cost of goods available for sale is the sum of ___plus ___ | beginning inventory, purchases |
| ___ is your business’s revenue (Net Sales) LESS the cost of goods sold. | Gross profit |
| sales revenue minus sales returns, allowances and sales discounts = | Net sales |
Created by:
shinjin11