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Accounting Quiz Gross Profit Rate=gross profit/net sales Profit Margin Ration=net income/net sales Revenue Recognition Principle- recognize revenue in the period it was earned Expense Recognition Principle- Expenses (efforts) should be matched with revenues (results). FOB Shipping Point- Ownership passes to buyer once goods are on the truck FOB Destination- Ownership passes to buyer once buyer has goods Discount on a good: Accounts payable 100 Cash 70 Inventory 30 Sales Returns and Allowances: Sales Returns and Allowances 300 Accounts Receivable 300 Inventory 140 Cost of Goods Sold 140 Sales Discount: Cash 100 Sales Discount 50 Accounts Receivable 150... View Full Document

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