Chapter 5 Flashcards
1
Q
Inventory Shrinkage
A
“Physical inventory” is LESS than “balance of inventory.”
2
Q
2 systems for
Merchandise Transaction Tracking
A
1) perpetual
2) periodic
3
Q
Perpetual Inventory System
A
Purchases and sales of inventory are recorded as they occur
4
Q
Periodic Inventory System
A
Physical inventory is prepared periodically
5
Q
Asset turnover ratio
A
= sales / average total assets
6
Q
Cost of Goods Sold
A
The expense of a good sold
7
Q
“Cost of Goods”
Is reported as?
A
An expense
8
Q
Retail companies income Statements include
A
Cost of goods sold
9
Q
N/eom
A
Payment due at end of month
10
Q
FOB shipping point
A
(Free on board)
Buyer pays
from the “point” it was shipped.
11
Q
FOB Destination
A
Seller pays
To deliver it to its destination
