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30 Cards in this Set
- Front
- Back
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The cost that is reported as an expense when merchandise is sold.
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cost of merchandise sold
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Sales minus the cost of merchandise sold.
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gross profit
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Merchandise on hand (not sold) at the end of an accounting period.
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merchandise inventory
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The inventory system in which each purchase and sale of merchandise is recorded in an inventory account.
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perpetual inventory system
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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
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A detailed listing of the merchandise for sale at the end of an accounting period.
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physical inventory system
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The bill the seller sends to the buyer.
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invoice
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Discounts taken by the buyer for early payment of an invoice.
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purchases discounts
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From the buyer's perspective, returned merchandise or an adjustment for defective merchandise.
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purchases return or allowance
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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.
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debit memorandum
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From the seller's perspective, discounts that a seller may offer the buyer for early payment.
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sales discounts
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From the seller's perspective, returned merchandise or an adjustment for defective merchandise.
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sales return or allowance
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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
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Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.
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trade discounts
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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
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Freight terms in which the seller pays the transportation costs from the shipping point to the final destination.
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FOB (free on board) shipping point
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A form of income statement that contains several sections, subsections, and subtotals
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multiple-step income statement
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Expenses that are incurred directly in the selling of merchandise.
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selling expenses
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Expenses incurred in the administration of general operations of the business.
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administrative expenses (general expenses)
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The excess of gross profit over total operating expenses.
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income from operations (operating income)
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The excess of operating expenses over gross profit.
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loss from operations
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Revenue from sources other than the primary operating activity of a business.
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other income
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Expenses that cannot be traced directly to operations.
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other expense
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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
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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
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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
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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
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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
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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 _____.
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$15,100
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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 ________.
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$33
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