FINALS Flashcards
What is a discount given to customers for early payment called?
Sales Discount
This type of discount incentivizes prompt payment by customers.
What is an outright deduction from the invoice price known as?
Trade Discount
It is usually applied before calculating taxes.
What are the terms of shipment where the freight charges are shouldered by the buyer but paid by the seller?
Freight Prepaid, FOB Shipping Point
This means the seller pays the freight charges initially.
What are the terms of shipment where the freight charges are shouldered by the seller but paid by the buyer?
Freight Collect, FOB Destination
The buyer pays for the freight charges upon delivery.
What are the terms of shipment where the freight charges are shouldered and paid by the seller?
FOB Destination, Freight Prepaid
The seller is responsible for the entire freight cost.
What are the terms of shipment where the freight charges are shouldered and paid by the buyer?
FOB Shipping Point, Collect
The buyer assumes responsibility for freight costs.
What is the cost of transporting the goods incurred by the seller called?
Freight Out
This cost is typically absorbed by the seller.
What is a business form that shows the goods or items sold together with the price, quantity, VAT, and terms of sale?
Sales Invoice
It serves as a record of the transaction.
What is a business form evidencing returns or allowances given to the customer?
Credit Memo
It documents the reduction in the amount owed by the customer.
What is the difference between net sales and cost of sales called?
Gross Profit
It indicates the profitability of a company’s core activities.
What format of the Income Statement classifies expenses according to their function?
Functional Format
This format groups expenses based on their operational purpose.
What is the manner of presentation of the Income Statement where expenses are classified according to their nature?
Natural Format
This format lists expenses based on their type, such as salaries, rent, etc.
What is the cost paid by the buyer for transporting the goods bought called?
Freight In
This cost is incurred by the buyer upon purchasing goods.
What are goods unsold at the end of an accounting period referred to as?
Ending Inventory
This represents the stock that remains unsold and is recorded in financial statements.
What costs are generally incurred in relation to borrowing such as interest, bank charges, and documentary stamps?
Finance/Financing Costs
These costs are essential for managing debt and financing operations.
