MERCHA Flashcards
The buyer shoulders the shipping cost
FOB SHIPPING POINT
FOB
Free on board
The sellers shoulder the shipping cost
FOB Destination
When goods are sold on account, a period time is called?
Credit period
The credit period is usually described as the _____ or _______.
Net credit period or net terms
‘In/ 10 eom
The invoice is due ten days after the end of the month
Some business give discounts for prompt payment
Cash discounts
The period is covered by the discount
Discount period
T or F: It is usually regrettable for the buyer to take a discount offered even if it would mean borrowing the money to make the payment.
F: Worthwhile
T or F: Trade discounts encourage the buyers to purchase products because of markdowns from the list price
True
T or F: There is trade discount account and there is special accounting entry for this discount.
False: No
T or F: Trade discount may be stated in series
True
T or F: Payment by either party will not dictate who should ultimately shoulder the cost
True
The shipping cost borne by the buyer using the periodic inventory system are ____ to ______ account.
Debited to Transportation In.
Is the key factor in determining cost of sales.
Merchandise inventory
