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30 Cards in this Set

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  • Back
The cost that is reported as an expense when merchandise is sold.
ch6
cost of merchandise sold
Sales minus the cost of merchandise sold.
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gross profit
Merchandise on hand (not sold) at the end of an accounting period.
ch6
merchandise inventory
The inventory system in which each purchase and sale of merchandise is recorded in an inventory account.
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perpetual inventory system
The inventory system in which the inventory records do not show the amount available for sale or sold during the period.
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periodic inventory system
A detailed listing of the merchandise for sale at the end of an accounting period.
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physical inventory system
The bill the seller sends to the buyer.
ch6
invoice
Discounts taken by the buyer for early payment of an invoice.
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purchases discounts
From the buyer's perspective, returned merchandise or an adjustment for defective merchandise.
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purchases return or allowance
A form used by a buyer to inform the seller of the amount the buyer proposes to debit to the account payable due the seller.
ch6
debit memorandum
From the seller's perspective, discounts that a seller may offer the buyer for early payment.
ch6
sales discounts
From the seller's perspective, returned merchandise or an adjustment for defective merchandise.
ch6
sales return or allowance
A form used by a seller to inform the buyer of the amount the seller proposes to credit to the account receivable due from the buyer.
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credit memorandum
Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.
ch6
trade discounts
Freight terms in which the buyer pays the transportation costs from the shipping point to the final destination.
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FOB (free on board) shipping point
Freight terms in which the seller pays the transportation costs from the shipping point to the final destination.
ch6
FOB (free on board) shipping point
A form of income statement that contains several sections, subsections, and subtotals
ch6
multiple-step income statement
Expenses that are incurred directly in the selling of merchandise.
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selling expenses
Expenses incurred in the administration of general operations of the business.
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administrative expenses (general expenses)
The excess of gross profit over total operating expenses.
ch6
income from operations (operating income)
The excess of operating expenses over gross profit.
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loss from operations
Revenue from sources other than the primary operating activity of a business.
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other income
Expenses that cannot be traced directly to operations.
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other expense
A form of income statement in which the total of all expenses is deducted form the total of all revenues.
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single-step income statement
The amount by which the merchandise for sale, as indicated by the balance of the merchandise inventory account, is larger than the total amount of merchandise counted during the physical inventory.
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inventory shrinkage
The form of balance sheet in which assets are reported on the left-hand side and the liabilities and owner's equity on the right-hand side.
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account form
The form of balance sheet in which assets, liabilities, and owner's equity are reported in a downward sequence.
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report form
A sales invoice for $8,000, terms 2/10, n/30, FOB shipping point, is paid within the discount period. Transportation costs of $125 are paid and added to the invoice. The amount of the discount is _________
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$160
A sales invoice for $15,000, terms 1/10, n/30, FOB shipping point, is paid within the discount period. Transportation costs of $250 are paid and added to the invoice. The total amount paid by the buyer is _____.
ch6
$15,100
A return of $500 has been recorded against a purchase invoice of $3,800, terms 1/10, n/30. The invoice is paid within the discount period. The amount of the discount is ________.
ch6
$33