International accounting standards 5

Question 1

Merchandise (znaczenie)

Answer 1

towar

Question 2

wholesaler (znaczenie)

Answer 2

hurtownik

Question 3

retailer (znaczenie)

Answer 3

detalista

Question 4

consumer (znaczenie)

Answer 4

konsument

Question 5

What is the primary source of merchandising companies?

Answer 5

Merchandising companies buy and sell goods
Their primary source of revenues is called „sales revenue” or „sales”.

Question 6

What is cost of goods sold?

Answer 6

• Not used in a service business
• It is the total cost of merchandise sold during the period

Question 7

gross profit (znaczenie)

Answer 7

zysk brutto

Question 8

Income Measurement (znaczenie)

Answer 8

pomiar dochodu

Question 9

Income measurement:

Answer 9

Sales
-Cost of goods sold
= Gross profit
- operating expenses
= net income

Question 10

Perpetual system:

Answer 10

• Maintain detailed records of the cost of each inventory purchase and sale
• Records continuously show inventory that should be on hand for every item
  -Company determines cost of goods sold each time a sale occurs

Question 11

freight costs (znaczenie)

Answer 11

koszty przewozu

Question 12

Purchase returns and allowances:

Answer 12

• Purchaser may be dissatisfied because goods are damaged or defective, of inferior quality, or do not meet specifications
• Purchase Return: Return goods for credit if the sale was made on credit, or for a cash refund if the purchase was for cash
• Purchase Allowance: May choose to keep the merchandise if the seller will grant a reduction of the purchase price

Question 13

Purchase discounts:

Answer 13

Credit terms may permit buyer to claim a cash discount for prompt payment.
Purchaser saves money. Seller shortens the operating cycle by converting the accounts
receivable into cash earlier

Example: 2/10, n/30 [2% discount if paid within 10 days, otherwise net amount due
within 30 days]
Example: 1/10 EOM [1% discount if paid within first 10 days of next month]
Example: n/10 EOM [Net amount due within the first 10 days of the next month]

Question 14

Sales returns and allowances:

Answer 14

-“Flip side” of purchase returns and allowances
- Contra revenue account to Sales Revenue (debit)
- Sales not reduced (debited) because it would obscure
importance of sales returns and allowances as a
percentage of sales and Could distort comparisons

Question 15

Income statement:

Answer 15

• Primary source of information for evaluating a company’s performance
• Format is designed to differentiate between various sources of income and expense

Question 16

Gross profit rate =

Answer 16

gross profit/net sales

Question 17

other income

Answer 17

• Interest revenue from notes receivable and marketable securities
• Dividend revenue from investments in capital stock
• Rent revenue from subleasing a portion of the store
• Gain from the sale of property, plant, and equipment

Question 18

other expense

Answer 18

• Casualty losses from such causes as vandalism and accidents
• Loss from sale or abandonment of property, plant, and equipment
• Loss from strikes by employees and suppliers