Exam (elaborations)
ACG 2021 chapter 5 (1)
ACG 2021 chapter 5 (1)
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ACG 2021 chapter 5expenses for a merchandising
company - ANS-1.) cost of goods sold
2.) operating espenses
2 inventory systems - ANS-1.) *perpetual inventory system*
- detailed records of inventory purchase and sale
-Records cost of goods sold each time a sale occurs
-indicates amount of inventory on hand at any given time.
2.) *periodic inventory system*
- Does not keep detailed records of goods throughout the period
- Determines cost of goods sold & on hand at the end of the accounting period
sales agreement - ANS-determines who pays the cost of transporting the goods.
purchase allowance - ANS-deduction made in the selling price of merchandise by seller
so the buyer will keep the merchandise
purchase return - ANS-return of goods from the buyer to the seller
purchase discount - ANS-cash discount claimed by a buyer for prompt payment of a
balance due
contra revenue account - ANS-account that is offset against a revenue account on the
income statement.
cost of goods sold - ANS-total cost of merchandise sold during the period
gross profit - ANS-the excess of net sales over the cost of goods sold
gross profit rate - ANS-gross profit expressed as a % by dividing gross profit by net
sales
net sales - ANS-sales minus sales returns and allowances and sale discounts
profit margin - ANS-measures the percentage of each dollar of sales that results in net
income, computed by dividing net income by net sales.
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