Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
9 Cards in this Set
- Front
- Back
|
Merchandise Income Statement includes? |
Sales- Sales Returns & Allowances - Sales Discounts = Net Sales Net Sales - Cost of goods sold = Gross Profit Cost of Sales (Cost of Good Sold) is usually a merchandise companies largest expense. |
|
|
What are the two inventory systems? |
Perpetual - update inventory records with every transaction Periodic - update inventory records at the end of the period (month) |
|
|
What does FOB Shipping Point mean ? |
buyer takes ownership of inventory when product leaves sellers dock and buyer usually pays the freight |
|
|
What does FOB Destination mean ? |
buyer takes ownership of once it is received at buyer's dock and seller usually pays the freight > If seller prepays the freight, usually the seller will add the freight cost to the buyers invoice. |
|
|
What does Freight- In mean? |
Is the cost of transportation for purchases and is part of inventory cost |
|
|
What are the accounts used to record the payment of cash for transportation in (Freight-In)? |
Inventory Dr Cash Cr |
|
|
What are the accounts used to record the payment of cash for transportation out (Freight-Out)? |
Outbound Dr
Cash Cr |
|
|
What do Purchase Returns and Allowances and Purchases Discounts do? |
Reduces the cost of inventory and so Inventory is credited |
|
|
What are Sales Discounts? |
When the seller offers an incentive to the buyer to pay an invoice early Terms of 2/10, n/30 = the buyer can take a 2% discount on the invoice total if the invoice is paid within 30 days. Payment Formula - (Purchase $ - Returns $ + Freight Cost) - {(Purchase $ - Return $) X discount %} = net payment amount |
