Accounting Process: Chapter 9 Flashcards
A person who buys and sells goods or merchandise is called a ___________.
Merchandiser
A _______ is one who buys in bulk from a manufacturer or another wholesaler and ells them in bulk to other wholesalers or retailers.
Wholesaler
A _______ buys merchandise from the manufacturer or wholesaler and sells them by piece to ultimate consumers.
Retailer
It refers to goods purchased for resale in the normal course of business.
Merchandise Inventory
This method records continuously or perpetually the movement of the merchandise and shows the inventory balance at any point in time.
Perpetual Method
Under this method, there is no detailed recording hence no inventory balance can be determined at any point in time.
Periodic Method
A physical count of goods.
Inventory Count
It is a source document that contains a list of closing stock.
Inventory Sheet
This follows the natural flow of the goods. It also means “first in - first out”.
FIFO Costing Method
It is earned when the merchandiser transfers the goods to the customer.
Sales Revenue
The sale is supported by a source document called an ______.
Invoice
It is a percentage reduction from a published list price.
Trade Discount
It is a discount that is meant to encourage a customer to pay immediately.
Cash Discount
It is a business document issued by the seller informing the buyer that his account was decreased.
Credit Memorandum
If it is the buyer who issues the document, instead of a seller, it is called a ________.
Debit Memorandum
If the term is _____________, it means that title of ownership passes to the buyer as soon as seller turns over the goods to a common carrier.
FOB Shipping Point
If the term is ________, the seller is liable for the freight and is still considered the owner of the goods until it reaches the buyer.
FOB Destination
Each time a purchase is made, a 12% VAT is included increasing the amount to be paid by the buyer which must be debited to ________.
Input Tax
Each time a sale is made, VAT is charged to the customer increasing the amount to be collected which is credited to ________.
Output Tax
