Chapter 9 Flashcards
Hard goods
Merchandise made principally from glass, metal, and china, which can be cleaned after exposure to smoke or water.
Soft goods
Merchandise made principally from textile and fabric, which is not truly restored by cleaning.
Incoming freight charges
The amount that the insured pays to have goods shipped to the insured’s premises from a supplier.
Trade discounts and allowances
Reductions from the stated purchase price, given by the supplier, for such reasons as purchasing in bulk or paying in a timely manner.
Internal handling costs
The insured’s cost to have its own employees handle stock, such as pricing and arranging.
retail method of accounting
an accounting procedure that assumes a consistent profit percentage so that goods marked down at retail also lose value as assets on the business’s books.
Out-of-sight merchandise
merchandise that has been damaged beyond recognition.
Income statement
the financial statement that reports an organizations profit or loss for a specific period by comparing the revenues generated with the expenses incurred to produce those revenues.
Balance sheet
the financial statement that reports the assets, liabilities, and the owners’ equity of an organization as of a specific date.
Cost of goods sold
an expense representing the cost of merchandise sold to customers during the period.
Cost of sales
An income statement value that represents the cost to the company of merchandise sold or services provided during the year (the inventory at the beginning of the period adjusted for all purchases made during the period, less those goods on hand at the end of the period).
Shrinkage
the reduction in stock on hand because of petty theft, breakage, unrecorded sales, and other mishaps.
Perpetual inventory
a method of continuously tracking inventory that may not have been reconciled to the actual physical inventory.
Reporting form
a form to periodically report fluctuating property values to insurer.
Full reporting clause
a clause that states that if the last report of values is less than the full value of the covered property at the time of the loss, then the insured participates in the loss in much the same manner as in coinsurance.
