chapter 6 Flashcards
cost of goods sold
Total cost of all goods that the merchandiser did sell to customers
what three accounts are important to a merchandiser
inventory, sales revenue, and cost of goods sold
gross profit equation
sales revenue-cost of good sold
cost of goods sold equation
beginning inventory + purchases - ending inventory=cost of goods
periodic inventory system
updates the inventory records for merchandise purchases, sales, and returns only at the end of the accounting period
Perpetual inventory system
the inventory records are updated every time inventory is bought, sold or returned
is inventory a debit or credit
debit
what does n stand for
net purchases
what does the number after n in credit terms stand for
maximum credit period
what does the first number in the credit term stand for
discount percentage offered
What are the two components each merchandise sale has in a perpetual inventory system
Selling Price, cost
What does on the multistep income statement
Net sales first, cogs, gross profit, selling, general and administrative expenses, income from operations, other expenses, income before income tax expense, income tax expense, net income
in a periodic inventory system, when do you record revenues
when sales are made
purchase returns and allowances, purchase discounts, and freight costs are recorded in separate accounts. True or False
True
