MATCHING
Inventory system that updates the merchandise inventory account only at the end of the accounting period based on a physical count of merchandise on hand.
Statement where net income is determined by deducting all expenses from all revenues.
Inventory system that updates the merchandise inventory account for every purchase and sale transaction.
Payment arrangements determined by the seller as to when invoices are due and whether early payment discount is offered.
Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier.
Statement that includes subtotals for net sales, gross profit, and net operating income in determining net income.
Losses of inventory due to theft, damage, spoilage, etc. that cause the actual inventory on hand to be less than that on record.
Shipping terms where the ownership of merchandise passes to the buyer when the buyer receives the merchandise.
FOB destination
Periodic inventory system
Credit terms
FOB shipping point
Multiple-step income statement
Inventory shrinkage
Perpetual inventory system
Single-step income statement
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Related questions
1.) X sold Y merchandise on account FOB shipping point, 3/10,net 30, for $10,000. X prepaid the $200 shipping charge. Using theperpetual inventory method, which of the following entries will Ymake if Y pays within the discount period?
Accounts Payable-X, debit $9,900; Cash, credit $9,900 | |
Accounts Payable-X, debit $10,000; Transportation In, credit$200; Cash, credit $9,800 |
Accounts Payable-X, debit $9,700; Merchandise Inventory, debit$200; Cash, credit $9,900 | |
Accounts Payable-X, debit $9,700; Transportation In, debit $200;Cash, credit $9,900 |
2.) Merchandise with an invoice price of $4,000 is purchasedsubject to terms of 2/10, n/30, FOB destination. Transportationcosts paid by the seller totaled $150. What is the cost of themerchandise, assuming the discount is taken?
$4,070 | |
$3,920 |
$4,067 | |
$4,150 |
3.) A sales invoice included the following information:merchandise price, $1,000; transportation, $200; terms 1/10, n/eom,FOB shipping point. Assuming that a credit for merchandise returnedof $300 is granted prior to payment, that the transportation isprepaid by the seller, and that the invoice is paid within thediscount period, what is the amount of cash received by theseller?
$693 | |
$893 |
$990 | |
$700 |
4.) X sold Y merchandise on account FOB shipping point, 2/10,net 30, for $10,000. X prepaid the $200 shipping charge. Which ofthe following entries does X make to record this sale?
Accounts Receivable debit $9,800; Sales credit $9,800; AccountsReceivable debit $200; Cash credit $200 | |
Accounts Receivable debit $10,400; Sales credit $10,400 |
Accounts Receivable debit $10,000; Sales credit $10,000 | |
Accounts Receivable debit $10,000; Sales credit $10,000;Transportation Out debit $200; Cash credit $200 |
