Of goods passes to the buyer i 5 9 an income

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Essentials of Marketing
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Chapter 13 / Exercise 4.4
Essentials of Marketing
Hair/Lamb
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of goods passes to the buyer. i 5 9. An income statement format that shows only one subtotal for total expenses. a 2 10. A ratio used to assess a company's ability to pay its current liabilities; defined as quick assets divided by current liabilities. h 6 AACSB: Communications AICPA BB: Industry AICPA FN: Decision Making Difficulty: Medium Learning Objective: A1 Learning Objective: C2 Learning Objective: P1 Learning Objective: P3 Learning Objective: P4 5-57
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Essentials of Marketing
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Chapter 13 / Exercise 4.4
Essentials of Marketing
Hair/Lamb
Expert Verified
Chapter 005 Accounting for Merchandising Operations 133. Match the following terms with the appropriate definition. 1. Periodic inventory system A notification that the sender has credited the recipient's account kept by the sender. 6 2. Debit memorandum The amount of time allowed before full payment is due. 4 3. Perpetual inventory system The description of the amounts and timing of payments from a buyer to a seller. 9 4. Credit period A notification that the sender has debited the recipient's account kept by the sender. 2 5. Selling expenses The time period in which a cash discount is available and a reduced payment can be made by the buyer. 10 6. Credit memorandum Net sales less cost of goods sold. 8 7. Sales discount An accounting method that updates the accounting records for merchandise transactions only at the end of a period. 1 8. Gross profit An accounting method that continually updates accounting records for merchandise transactions. 3 9. Credit terms A cash discount granted to customers for paying within the discount period. 7 10. Discount period The expenses of promoting sales, by displaying and advertising merchandise, making sales, and delivering goods to customers. 5 AACSB: Communications AICPA BB: Industry AICPA FN: Decision Making Difficulty: Medium Learning Objective: C1 Learning Objective: C3 Learning Objective: P1 Learning Objective: P2 Learning Objective: P4 5-58
Chapter 005 Accounting for Merchandising Operations Short Answer Questions 134. Identify and explain the key components of income for a merchandising company. The basic components of income begin with net sales. Cost of goods sold is subtracted from net sales to get gross profit (also called gross margin). Operating expenses are then subtracted from gross margin to determine net income. AACSB: Communications AICPA BB: Industry AICPA FN: Decision Making Difficulty: Easy Learning Objective: C1 135. Describe the difference between wholesalers and retailers. A wholesaler is an intermediary that buys products from manufacturers and sells to retailers or other wholesalers. A retailer is an intermediary that buys products from manufacturers or wholesalers and sells them to consumers. AACSB: Communications AICPA BB: Industry AICPA FN: Decision Making Difficulty: Medium Learning Objective: C1 136. Describe the key attributes of inventory for a merchandising company.

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