Accounting Ch 5

Home > Flashcards > Print Preview

The flashcards below were created by user slone3000 on FreezingBlue Flashcards. What would you like to do?

  1. Cost of goods sold
    The total cost of merchandise sold during the period.

    • This expense is directly related to the revenue recognized from the sale
    • of goods
  2. Perpetual Inventory System
    • A detailed inventory system in which a company maintains the cost of
    • each inventory item and the records continuously show the inventory that
    • should be on hand.
  3. Periodic Inventory System
    • An inventory system in which a company does not maintain detailed
    • records of goods on hand and determines the cost of goods sold only at
    • the end of an accounting period.
  4. FOB shipping point
    • means that the seller places the goods free on board the carrier, and
    • the buyer pays the freight costs.
  5. FOB destination
    • means that the seller places the goods free on board to the buyer's
    • place of business, and the seller pays the freight.
  6. Purchase discount
    • A cash discount claimed by a buyer for prompt payment of a balance
    • due.

    • 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. This incentive offers advantages to both parties: The
    • purchaser saves money, and the seller is able to shorten the operating
    • cycle by converting the accounts receivable into cash earlier.

Card Set Information

Accounting Ch 5
2010-05-21 21:47:42
Merchandising operations multi step income statement

Ch 5
Show Answers:

What would you like to do?

Home > Flashcards > Print Preview